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In July, UK mortgage approvals reached 65,352, the highest monthly total since January, signaling a potential stabilization in the housing market after the end of a homebuyer tax break earlier this year. Despite the rise in approvals, Nationwide Building Society noted a decline in house prices for August, reflecting ongoing affordability issues. Consumer borrowing also rose by 7% in the year up to July, marking the largest increase since October 2024. These trends show a mixed picture of recovery, with growth in mortgage activity alongside persistent affordability and borrowing pressures.
In July, UK lenders approved 65,352 mortgages, the highest number recorded since January, according to the Bank of England. This rise in mortgage approvals points to signs of stabilization in the housing market, which had faced volatility following the expiration of a homebuyer tax break earlier in the year. Analysts see this as a positive development for market activity, showing renewed confidence among buyers and lenders. Advertisement
Despite the encouraging figures in mortgage approvals, Nationwide Building Society reported that house prices fell unexpectedly in August. This indicates that while more mortgages are being approved, affordability remains a key concern for buyers, and the housing market continues to face challenges in balancing price growth with consumer accessibility.
Consumer borrowing has also seen a notable increase. Over the 12 months leading up to July, borrowing grew by 7%, the largest annual rise since October 2024. The trend highlights that households are increasingly relying on credit, which may affect their long-term financial stability amid higher living costs and mortgage commitments.
The combination of rising mortgage approvals, falling house prices, and higher consumer borrowing illustrates the complex dynamics currently shaping the UK housing market. While lending activity is picking up and suggesting some recovery, affordability pressures and increased debt levels remain significant factors that could influence the pace and sustainability of this rebound.
Source: Reuters
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