The number of mortgage approvals made to home buyers jumped to a six-month high in July, according to Bank of England figures.
Some 65,352 mortgage approvals for house purchases were recorded in July, marking the highest total since 65,775 approvals in January 2025.
The figures were released as Nationwide Building Society reported that UK house prices dipped by 0.1 per cent in August, compared with July.
House prices are still high compared to household incomes, the building society’s report said.
Richard Donnell, executive director at Zoopla, said: “We expect a continued increase in demand for mortgages as sales continue to increase.”
But he said that, with some mortgage rates edging higher and concerns over potential taxes, this may have a dampening effect on activity in the next one or two months.
Simon Gammon, managing partner, Knight Frank Finance, said: “Rising stock levels, improving mortgage pricing and stronger wage growth have slowly but steadily supported affordability over the course of the year.
“The narrative has shifted in recent weeks, however. A split within the Bank of England’s Monetary Policy Committee, stubborn inflation and wage growth, and relatively robust growth figures have cast doubt on whether the (Bank of England) can cut interest rates again this year. Uncertainty around potential tax rises in the upcoming Budget has added to the caution. A handful of lenders have nudged rates higher over the past week, but it is too early to say if this marks the start of a sustained move upward. The next few weeks of data will be crucial.”
The Bank of England’s Money and Credit report also said that the annual growth rate for consumer credit, which includes forms of borrowing such as credit cards and personal loans, ticked up to seven per cent in July, from 6.8 per cent in June.
Within the total, the annual growth rate for credit card borrowing rose to 10.1 per cent in July, from 9.7 per cent in June.
Simon Trevethick, head of communications at StepChange Debt Charity, said: “This year has been tough on household finances, with steep rises in the cost of bills and utilities, and a recent rise in inflation, people may be relying on credit to cope. At StepChange not only have we seen more people coming to us for help in recent months, but debt levels continue to climb, particularly in arrears on essential household bills.
“If anyone is worried about repaying their debts, we would urge you to speak to your creditors who will have support in place.”
Households’ deposits with banks and building societies increased by £7.3 billion in July, following a net increase of £8.0 billion in June.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “July is typically an expensive month as households jet off on holiday, prompting higher spending which may explain the slight dip in savings activity.”
UK non-financial businesses borrowed, on net, £5.0 billion of loans from banks and building societies (including overdrafts), compared with £2.3 billion of net repayment in June.
Within this, big non-financial businesses borrowed £4.3 billion, compared with a £2.5 billion net repayment in June. Net borrowing by small and medium-sized non-financial businesses (SMEs) increased to £0.7 billion in July, the highest since March 2021 (£0.9 billion), compared to £0.2 billion in June.
