UK Property Market Slows as Mortgage Approvals Drop 15% in May

The United Kingdom's property market is showing signs of a slowdown, with mortgage approvals for house purchases falling by 14.9% in May compared to the previous month. Bank of England data released on June 29, 2026, indicated that 56,205 mortgage approvals were granted for home purchases during May.

Annually, mortgage approvals for homebuyers were down 10.8% year-on-year, marking the weakest reading in five months and falling 8% below the five-year average of 61,094. This decline is a cause for concern among housebuilders, many of whom are already reducing new projects and land acquisition, according to Anthony Codling of RBC Capital Markets.

"The sharp monthly decline is likely to negatively impact the UK housebuilders who had been enjoying a steady improvement through the first quarter of the year," Codling stated. "April's print of 66,034 was the strongest since late 2024, making May's fall all the more jarring. Year-to-date the picture remains broadly supportive: the January-to-May average of 61,972 is holding up, but momentum has stalled."

Estate agents and brokers on the ground are also observing this trend. "Mortgage approvals are arguably the most important of all the housing market data, as they are forward, rather than backward facing, so are a reliable indicator of future activity," said Jeremy Leaf, a north London estate agent and former Rics residential chairman. "On the ground, we are finding it is not just the numbers which are down, but the time genuine buyers are taking before playing their mortgage offer card."

Leaf added that concerns about the direction of mortgage rates and the ongoing cost of living, exacerbated by the conflict in Iran, are delaying decision-making. "Looking forward, we expect more of the same at best particularly now that political uncertainty is adding to this caution."

Gareth Lewis, deputy chief executive of specialist lender MT Finance, attributed the drop in buying appetite to higher mortgage rates. "These numbers are a sign of what is happening at this moment in time," Lewis said. "We are now seeing the ramifications of the interest rate environment becoming unstable again and the impact this is having on transactions. Volatile funding rates are the real issue at the moment; while everything pointed towards a lower interest rate environment this year, the impact of war in the Middle East has since changed this outlook."

Mortgage rates have reportedly risen again due to inflation stemming from the conflict with Iran, reversing expectations of Bank of England rate cuts. This has led to increased costs for those remortgaging or purchasing a home. The data underscores the importance of seeking competitive mortgage rates and obtaining expert advice for buyers and homeowners alike.