Mortgage approvals to home buyers dipped to two-year low in January

The number of mortgage approvals being made to home buyers slumped to a two-year low in January, falling below 60,000 for the first time since January 2024, according to Bank of England figures.

Some 59,999 approvals for house purchases were recorded in January 2026, marking the lowest total since 55,946 approvals in January 2024, the Bank’s Money and Credit report said.

Approvals for remortgaging, which only capture remortgaging with a different lender, also decreased to around 38,100 in January, from 38,400 in December.

The figures were released as Nationwide Building Society said that house price growth was “steady” in February, with housing market activity expected to pick up in the months ahead.

Nationwide said that the average UK house price increased by 0.3% month-on-month in February, with values rising by 1.0% annually.

The typical house price in February was £273,176, according to Nationwide’s report.

Lucian Cook, head of residential research at Savills, said: “With nominal house price growth running at just 1.0%, prices are still falling on an inflation adjusted basis.

“This is contributing to a gradual improvement in affordability, particularly across London and the south. However, against the current economic backdrop, many prospective buyers remain cautious about taking advantage of that improved position.”

He added: “At the top end of the market, activity above £1 million remains down 3.2% year‑on‑year. This increasingly points to a slow bottom‑up market recovery.”

Richard Donnell, executive director at Zoopla said: “The latest mortgage approvals data align closely to the overall trends in the housing market with a sustained recovery in sales since 2023 now starting to plateau.”

Rob Wood, chief UK economist at Pantheon Macroeconomics said: “Granted net new mortgage approvals for house purchase disappointed the consensus by falling to a two-year low.

“But we are confident that housing transactions will pick up now. Approvals are likely reflecting poor sentiment around the budget with a lag.”

Jason Tebb, president of OnTheMarket, said: “Last year’s rate reductions had a positive impact on activity, and further cuts this year should boost activity and transactions.”

Jeremy Leaf, a north London estate agent said: “Clearly buyers are still nervous despite expectations that inflation and mortgage rates will continue along a downwards path. On the ground the amount of choice, particularly of flats, is encouraging more first-time buyers to transact.”

Simon Gammon, managing partner, Knight Frank Finance, said: “The outlook for activity and rates appeared relatively benign only last week, but conflict in the Middle East has introduced fresh uncertainty.

“Any spike in oil prices could fuel global inflation or, at the very least, prompt central banks, including the Bank of England, to delay further rate cuts until the outlook becomes clearer.”

Meanwhile, the annual growth rate for consumer credit remained unchanged at 8.3% in January, the Bank of England report said.

Within this total, the annual growth rate for borrowing using credit cards slowed to 12.3%, from 12.4% previously.

Households’ deposits with banks and building societies increased by £4.2 billion in January, following net deposits of £4.5 billion in December.

Underlying the net increase was an additional £5.2 billion cash injection into Isas, with inflows into accounts being partially offset by withdrawals.

In January, UK non-financial businesses borrowed, on net, £7.9 billion of loans from banks and building societies (including overdrafts), following £1.1 billion of net borrowing in December.