Mortgage approvals unexpectedly slide in January

2nd Mar 2026 11:49

(Sharecast News) - Mortgage approvals slid to a surprise two-year low in January, Bank of England data showed on Monday.

According to the central bank's latest Money and Credit report, there were 59,999 net mortgage approvals for house purchase in January, down on December's 61,007. It was below the average of around 64,100 for the previous six months, and the lowest print since January 2024. Analysts had been expecting approvals to rise to around 62,000.

Net borrowing of mortgage lending decreased to £4.1bn from £4.5bn, as repayments picked up, while the effective interest rate - the actual rate paid - on newly-drawn home loans decreased to 4.09% from 4.15% in December.

The housing market faltered at the end of 2025, on the back of uncertainty around the later-than-expected Budget. Demand is also traditionally more subdued in December.

Since then, however, industry surveys - including data from Nationwide, also released on Monday - have shown house prices ticking higher in both January and February.

Matt Swannell, chief economic adviser to the EY Item Club, said: "The weakness in activity over December and January appears inconsistent with other measures of underlying conditions in the housing market, so there's a good chance that recent declines unwind in the near term.

"Swap rates have fallen sharply over the past month, after the Monetary Policy Committee's February meeting minutes struck a move dovish tone than was anticipated. This will likely push down quoted mortgage rates, which is expected to support a rebound in mortgage approvals in the coming months."

The BoE report also showed an increase in net borrowing of consumer credit by individuals, to £1.8bn from £1.7bn in December. Within that, net borrowing on credit cards was £0.9bn, up from £0.8bn a month earlier, while borrowing from other forms of credit - including car dealership finance and personal loans - was unchanged.

Households also deposited an additional £4.2bn with banks and building societies in January.

Swannell noted: "Although real household growth is cooling sharply, firming confidence should mean consumers save less and take on more credit, keeping growth in consumer spending steady this year."