The latest lending figures from the Bank of England provide another encouraging sign that confidence is returning to the housing market. While buyers continue to navigate a changing economic landscape, the latest data suggests that many are pressing ahead with their home-moving plans.
Mortgage borrowing sees a significant jump
According to the Bank of England’s latest Money and Credit report, net mortgage borrowing increased to £7.7 billion in June, more than doubling from £3.3 billion in May. The figure is also well above the previous six-month average of £4.9 billion, highlighting a noticeable increase in borrowing activity.
Alongside this, net mortgage approvals for house purchases rose to 58,200 in June, up from 56,600 in May. Although slightly below the recent six-month average of around 61,400, mortgage approvals are widely regarded as a leading indicator of future market activity. An increase suggests that more buyers are securing finance and preparing to complete their purchases in the months ahead.
Remortgaging activity also strengthened, with approvals (excluding those arranged with an existing lender) rising to 34,200, reflecting continued confidence among homeowners reviewing their mortgage options.
A market adapting to changing conditions
The improvement in lending comes despite ongoing economic uncertainty. Inflation eased slightly in June, with the Consumer Prices Index (CPI) falling to 2.6%, down from 2.8% in May. Although inflation remains above the Bank of England’s 2% target, the Bank Rate has remained unchanged at 3.75% since December 2025.
Mortgage lenders had gradually been reducing rates in recent months following the ceasefire in the Middle East. However, renewed geopolitical tensions have prompted some lenders to increase pricing once again. Even so, mortgage rates remain below the highs seen when the conflict first escalated.
Buyers remain active despite challenges
Buyer demand has softened compared with the strong start to the year, as some households delayed moving decisions due to higher mortgage rates, political uncertainty in the UK and wider global events. Nevertheless, the housing market has demonstrated remarkable resilience.
There were 98,450 residential property transactions completed in May, representing a 17% increase compared with May 2025. This illustrates that while conditions may have become more measured, people are still proceeding with their home moving plans.
Importantly, many of today’s movers are not waiting for the “perfect” market. Life events such as growing families, job relocations, downsizing, retirement or relationship changes continue to drive housing decisions regardless of wider economic conditions. These non-discretionary movers provide an important foundation for ongoing market activity.
More choice creates opportunities
One of the defining features of today’s market is the greater choice available to buyers. The number of homes coming onto the market remains elevated, giving purchasers more options and greater negotiating power than they have enjoyed for several years.
As a result, buyers are taking a more considered approach and are often cautious about paying inflated prices. This is reflected in the latest data from Rightmove, which shows the average asking price of a newly listed home fell by 1% in July to £372,359.
For sellers, this reinforces the importance of setting a realistic asking price from the outset. Properties priced in line with current market conditions continue to attract interest and achieve successful sales. By contrast, homes that enter the market overpriced and later require price reductions often remain available for much longer, potentially reducing buyer confidence.
Looking ahead
The latest mortgage lending figures paint an encouraging picture of a market that continues to move forward despite ongoing economic and geopolitical uncertainty. Rising mortgage borrowing and increasing approvals suggest that confidence is gradually strengthening, even if buyers remain selective and value-conscious.
For those considering a move, today’s market offers opportunities on both sides. Buyers have more choice and greater negotiating power, while sellers who price their homes realistically can still achieve successful outcomes.
As always, navigating changing market conditions is easier with expert advice. Whether you are buying your first home, moving up the property ladder or planning your next chapter, working with a knowledgeable local property professional can help you make informed decisions and achieve the best possible result.
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