UK Mortgage Approvals 2026: Good news for the UK housing market as mortgage approvals for home buyers bounced back in February, reaching 62,600 after dipping to 60,200 in January. That’s the sharpest rise since November, and it topped what economists expected, per the Bank of England’s fresh data out yesterday.
UK Mortgage Approvals Surge to 62,600 in February
UK mortgage approvals for house purchases rebounded sharply to 62,600 in February 2026 from a revised 60,200 in January, which is the largest monthly increase since November 2025 and above consensus forecasts of 61,300. This figure, detailed in the Bank of England’s Money and Credit report released March 29, remains just shy of the prior 6-month average of 63,500 but signals renewed buyer confidence amid falling rates and pre-geopolitical stability. Remortgaging approvals (with a new lender) jumped to 41,200 from 38,500, while net secured lending rose to £4.8 billion from £4.2 billion, exceeding the six-month average of £4.5 billion.
What Happened
In February 2026, UK mortgage approvals for house purchases climbed to 62,600 from January’s revised 60,200—the sharpest monthly rise since November 2025 and above forecasts of 61,300. This rebound, from the Bank of England’s March 29 Money and Credit report, shows stabilizing housing demand after a five-month slide to two-year lows, fueled by lower rates around 4.10%. Remortgaging approvals surged to 41,200 (up 2,700), net borrowing hit £4.8 billion (above 6-month average of £4.5bn), and gross lending edged to £23.9 billion.
What are the reasons
Lower mortgage rates around 4.10% for new deals, down from peaks, improved affordability and drew buyers back after January’s slump. Renewed confidence emerged post-budget uncertainty from Rachel Reeves’ November 2025 announcement, with no major tax shocks repeating the late-2025 dip.
- Rate Stability and Cuts: Bank of England held at 3.75% (Feb decision), with lenders passing on prior reductions; competition boosted sub-4% options.
- Post-Holiday Momentum: February captured pent-up demand after Christmas spending and January caution, before Iran war rattled markets.
- Easing Affordability: House prices up modestly (0.3% MoM to £273k per Nationwide), first-time buyers active amid relaxed criteria.
Household deposits rose sharply (£5.8bn, ISAs £4.6bn), signaling savings ready for down payments. Lender surveys showed rising approvals pre-war, bucking early 2026 softness forecasts. Remortgaging surged on cheap refinancing, totaling £4.8bn net borrowing above average.
Impact of Bank of England interest rates on housing market
Bank of England interest rates play a pivotal role in steering the UK housing market by directly affecting how affordable mortgages feel for everyday buyers. When the Bank cuts rates like the drop from 5.25% in 2024 down to 3.75% by late 2025, monthly repayments shrink, sparking more demand that lifts mortgage approvals and nudges house prices up modestly, as seen in February 2026’s sharp rise to 62,584 approvals, the biggest jump since November.
On the flip side, holding or hiking rates, especially amid risks like the Iran war stoking inflation and energy costs, squeezes borrowing power, cools buyer enthusiasm, and leads to dips like January’s 59,999 approvals that is the lowest in 2 years with stabilizing prices but slowing transactions.
Overall, this push-pull keeps the market resilient yet cautious, with forecasts eyeing further cuts to around 3.25% supporting 2-2.5% price growth if inflation settles.
Bigger Picture
February’s 62,600 approvals (up from 60,200) mark a tentative housing recovery after 2025’s post-stamp-duty cool down and January’s budget-driven low, but volumes lag pre-2023 peaks by 20-25%. With UK Finance forecasting 1.2m transactions (-1% YoY) and £300bn gross lending (+4%), the market eyes modest 2-4% price growth amid rate cuts to ~3% by year-end.
Long-Term Trends
| Period | Avg Monthly Approvals | Key Driver | Price Growth YoY |
|---|---|---|---|
| 1986-2023 | 80,880 | Low rates boom | N/A |
| 2024-25 | ~65,000 | High rates, duty end | +1-2% |
| 2026 Fcast | 67,000 (end-yr) | Cuts to 3%, affordability | +2.5% |
BoE’s steady 3.75% rate aids stability, but Iran war risks, inflation, and £1.7tn mortgage stock (3% growth) cap upside. Remortgaging boom (41,200) reflects refinancing wave, consumer credit at 8.5% growth shows spending resilience. Overall, a soft landing for housing, guiding policy amid 3.4% secured lending growth.
What’s Next? Forecasts Eye 67,000 by 2027
Analysts like Trading Economics predict UK mortgage approvals will dip slightly to 61,500 by Q1 end but climb to 67,000 in 2027 and 69,000 in 2028, thanks to Bank Rate cuts toward 3-3.25%. UK Finance sees 1.2 million transactions and £300 billion gross lending in 2026, with house prices up 2-4% stronger outside London. Expect first-time buyers to lead as affordability improves, though Iran war risks and inflation could slow things. BoE data will steer rate decisions, eyeing a steady rebound.
Conclusion
The increasing of UK Mortgage Approvals 2026 to 62,600 feels like a much-needed breather for the housing market after a rough patch of declines, sparked by cheaper rates around 4.10% and folks shaking off budget nerves. Looking ahead, experts see approvals climbing toward 67,000 by 2027 with house prices nudging up 2-4%, but things could get bumpy if the Iran war drags on or inflation flares up. It’s a hopeful sign of recovery, and the Bank of England will be watching closely for any rate tweaks to keep the momentum going.
FAQ’s on UK Mortgage Approvals 2026
What are UK mortgage approvals?
This is how many new loans to buy properties were accepted in a month, indicating the current demand for housing.
What was the number of UK mortgage approvals 2026?
62,600, going from 60,200 in January (the largest increase since November 2025).
What caused this increase in UK mortgage approvals 2026?
Lower interest rates on mortgages (around 4.1%), stable Bank of England Base Rate at 3.75% and pent-up demand left over from a weak month of January.
How do Bank of England rates affect housing?
A lower interest rate reduces monthly mortgage payments while increasing the number of approved applications and the price of property; a higher interest rate makes borrowing funds more expensive and slows down the housing market.
