Property News
Mortgage Approvals Hit 32-Month Low: What Sellers Need to Know
Buyers are being squeezed by rising mortgage rates and Budget nerves, and the August approvals figures show it.
What is your property worth?
Get genuine offers from checked & vetted buyers.
Net mortgage approvals for house purchases fell to 54,900 in August, the lowest figure since December 2023, according to Bank of England figures published on 29 September 2026. Buyers are being squeezed by mortgage rates that have crept up for six months, and many are simply waiting to see what the Autumn Budget brings. If you're selling this autumn, it means fewer buyers with a mortgage in hand, and much less room for wishful pricing.
- Approvals for house purchases dropped to 54,900 in August from 55,900 in July, and sit well below the six-month average of about 60,100 (Bank of England).
- The average rate on newly drawn mortgages rose to 4.60% from 4.45%, while Bank Rate has been held at 3.75% for six meetings running.
- Price data is mixed rather than collapsing: Rightmove's asking prices ticked up 0.7% in September, while Zoopla puts annual growth at just 0.9%.
- Well-priced homes are still selling. Overpriced ones are the ones going stale.
- If you must sell, price to the buyers who can actually get a mortgage today, not the ones who could have in January.
What did the Bank of England actually report?
The Bank's monthly Money and Credit release for August landed on 29 September, and the mortgage line is the one that matters for anyone with a house to sell. Net approvals for house purchases came in at 54,900. That's down from 55,900 in July, below the roughly 56,100 economists had pencilled in (as reported by Sharecast), and the weakest reading since December 2023.
- 54,900net mortgage approvals for house purchase, August 2026
- 34,000remortgage approvals, down from 34,600 in July
- 4.60%effective rate on newly drawn mortgages, up from 4.45%
- £4.4bnnet mortgage borrowing, up from £4.1bn in July
Two things jump out. First, the drop month to month is small, about 1,000 approvals. The bigger story is the gap to the recent norm: 54,900 is roughly 5,200 below the six-month average of about 60,100, which works out at a shortfall of around 8.6%. That's not a wobble. That's a market that has lost a chunk of its buying power.
Second, the price of borrowing has moved the wrong way. The Bank's effective rate on newly drawn mortgages hit 4.60%, from 4.45% a month earlier. The rate across the whole stock of existing mortgages edged up to 4.00% from 3.97%, which tells you that people coming off cheap deals are slowly rolling onto dearer ones.
Is a 32-month low as dramatic as it sounds?
Bloomberg's headline called it a 32-month low, and technically that's right. But context matters, and I'd rather you read this as a warning light than a fire alarm.
Approvals in the mid-50,000s are not a market in freefall; the last time they were this low was the tail end of 2023, and the market carried on. What's different this time is the direction of travel: at the start of the year, lenders were cutting rates, the Bank of England had trimmed Bank Rate to 3.75% in December 2025, and the talk was of a busy 2026. Moneyfacts' Rachel Springall said in January that expectations were high for a "booming market" in 2026. That optimism has been quietly taken apart.
So the honest description is this. The market hasn't crashed. It has stalled, and it's stalled because of the cost of money rather than any lack of appetite for homes. Zoopla's latest index shows home searches 7% higher than a year ago, the strongest annual rise in twelve months. People are looking. They're just not all managing to get a mortgage over the line.
Why have mortgage rates crept up when Bank Rate hasn't moved?
This is the bit that catches people out. The Bank of England has held Bank Rate at 3.75% for six consecutive meetings, so you'd think mortgage rates would be sitting still. They aren't, because fixed-rate mortgages follow what markets expect rates to do, not where the base rate is today.
According to Matt Swannell of the EY Item Club, quoted rates on new mortgages have risen from around 4% to 5% over the past six months, "as financial markets have shifted from expecting interest rate cuts to interest rate hikes". Katie Clinton of KPMG UK linked it to the conflict involving Iran, saying the shocks from it "push up both inflation and mortgage rates". Consumer price inflation is at 3.1%, against the Bank's 2% target, and that's the number keeping the Monetary Policy Committee cautious.
Rightmove's September index puts numbers on the same pattern, reporting that the average two-year fixed rate rose to 5.29% from 5.09% the month before. Zoopla, meanwhile, says typical mortgage rates are now around 4.8% versus 4% in January.
One small caution on comparing those figures. The Bank's 4.60% is the actual average paid on mortgages drawn in August across all loan sizes and deposits, while Rightmove and Zoopla are tracking advertised or typical rates. They measure different things and shouldn't be lined up like for like. What matters is that all of them are pointing upward.
What does a rate rise like this do to what a buyer can afford?
It hits harder than the headline percentages suggest. Zoopla calculates that buyers' purchasing power has fallen 9% since January: someone who could borrow £200,000 at the start of the year can now borrow about £182,000 for the same monthly payment.
To see it in pounds, here's my own back-of-the-envelope arithmetic for a £200,000 repayment mortgage over 25 years. It's an illustration, not a quote from any lender.
| Mortgage rate | Monthly payment on £200,000 | Difference vs 4.0% |
|---|---|---|
| 4.00% | about £1,056 | baseline |
| 4.60% | about £1,123 | +£67 a month |
| 5.00% | about £1,169 | +£113 a month |
| 5.29% | about £1,203 | +£147 a month |
Nearly £150 a month more to borrow the same money isn't dramatic to a household that's already settled. To a first-time buyer stretching their budget to the limit, it's often the difference between a yes from the lender and a no. And every one of those "no" decisions is one fewer buyer for the person selling their home.
Why are buyers waiting for the Budget?
There's a second force at work on top of rates, and it's psychological. Several industry voices reacted to the approvals figures by pointing at the Autumn Budget.
John Phillips, chief executive of Just Mortgages and Spicerhaart, said: "There's no question that there's some element of wait and see right now ahead of the Budget." Nathan Emerson, chief executive of Propertymark, said many prospective buyers "have understandably been taking a more cautious approach and waiting to see". Phillips also pointed out, more mundanely, that August is prime holiday season, so a dip isn't shocking. Jason Tebb, president of OnTheMarket, noted the summer's heat as a distraction too.
I'd weigh those explanations differently. Holidays and hot weather explain a soft August. They don't explain why approvals are now well under the six-month average, and they don't explain the rate rise. The Budget wait is real, since buyers hate committing before they know whether property taxes are about to shift, but the rate story is the one doing the heavy lifting.
Jeremy Leaf, the estate agent and former RICS chair, made the point that these numbers are likely to prove "a reliable indicator of buyer intent and activity levels in the period up to Christmas". Approvals are what turn into completions a couple of months later. A weak August is a weak Q4 in the making.
So are house prices falling?
Not in the way the approvals headline might make you fear, and this is where I'd push back on anyone telling you the sky is falling. Different price measures are telling a mixed story.
That's Rightmove's September asking price index, published on 21 September. Nationally, the average asking price reached £367,440, up 0.7% on the month, which Rightmove described as the first monthly rise since May. But it's still 0.8% lower than a year ago. Sellers are asking a bit more this month, and buyers aren't yet paying it.
Zoopla's index, which tracks what homes actually sell for rather than what they're advertised at, has annual growth at 0.9%, down from 1.3% in June, with an average price of £272,800.
One warning about the asking price numbers. Rightmove tracks the price sellers hope for, so it can jump around based on which homes come to market in a given month. A single month's rise in asking prices tells you about seller confidence, not buyer behaviour. Treat it accordingly.
What's the regional picture?
This is where it gets interesting, because the UK doesn't move as one market and the differences are stark.
| Region | Average asking price | Annual change | Average days to sell |
|---|---|---|---|
| Scotland | £207,426 | +4.2% | 33 |
| North East | £199,973 | +2.7% | 55 |
| North West | £274,774 | +1.7% | 57 |
| South East | £471,138 | -1.8% | 72 |
| London | £657,775 | -2.6% | 78 |
Source: Rightmove House Price Index, September 2026. The national average time to sell is 64 days.
Look at the pattern. The cheaper northern markets and Scotland are still growing and selling in around a month or two. The expensive southern markets are shrinking slightly and take over ten weeks. The reason is affordability arithmetic: a 9% cut in borrowing power bites much harder when the average home costs £657,775 than when it costs £199,973.
Rightmove also reported that 91% of properties put up for sale in Scotland find a buyer, against 42% in London. Read that London figure twice. It doesn't mean 58% of Londoners never sell, since some withdraw and relist. It does mean that a big share of London sellers are asking for prices the market isn't willing to pay.
Zoopla's regional picture points the same way: it names Northern Ireland (5.4%), the North West (3.1%) and Yorkshire and the Humber (1.7%) as the growth leaders, with London (-1%) and the South East (-0.3%) the softer markets. Zoopla's search interest is strongest in the South East (+8.9%) and East of England (+8.5%), which suggests buyers are there but are hunting for bargains.
If you want to see where your own postcode sits, our house prices guide is a good starting point, and how much is my house worth takes you to a proper valuation.
What's the good news in all this?
- Buyer interest is there: Zoopla says searches are up 7% year on year, the biggest jump in a year.
- Sales agreed are 6% lower than last year, but Zoopla says the gap is narrowing.
- Well-priced homes are still selling at broadly last year's speed in most regions (Zoopla).
- The Bank of England isn't cutting the economy's legs out from under buyers: Bank Rate is steady at 3.75%.
- Approvals are around 8.6% under their six-month average.
- Markets have gone from expecting rate cuts to expecting hikes, according to the EY Item Club.
- 5% more homes are for sale than a year ago (Zoopla), so buyers have more choice.
- Consumer credit borrowing hit £2.5bn in August, described by Sharecast as the biggest monthly rise since records began in 1993, which points to household budgets being stretched.
Richard Donnell, executive director of research at Zoopla, put the sellers' side of it plainly: well-priced homes will continue to attract buyers and sell this autumn. Read that in reverse and you get the warning. The ones that aren't well priced will sit.
What does the spike in consumer credit tell us?
It's easy to skim past the non-mortgage numbers, but I'd pause on them. Net consumer credit borrowing rose to £2.5bn in August from £2.1bn in July, and credit card borrowing was £1.2bn, up from £0.9bn, according to the Bank. Annual growth in consumer credit stands at 9.6%.
Julie Palmer of BTG suggested the rise "likely reflects the rising cost of living, as more people use credit to pay for essentials". I think that's the right read. It matters to sellers because a buyer who's leaning more on credit cards and personal loans is a buyer whose lender will look at their finances more sharply. Affordability checks bite before the interest rate does.
What does this mean if you're selling your home now?
Here's my honest view. If your plan was "list high, see what happens, drop later", this is a bad market for that plan. Fewer mortgage-backed buyers means fewer viewings turning into offers. Overpriced homes get stale, and once a listing has been on the portals for eight or ten weeks buyers start asking what's wrong with it, which weakens your negotiating position more than a modest price cut would have done at the start.
A few things I'd do differently in this market than a year ago:
- Price to the mortgage, not the memory. Work out what a buyer with a normal deposit can borrow at 5% or so and price to that, not to the top figure you saw a neighbour achieve in spring.
- Get your paperwork ready before you list. Fewer buyers means every one of them matters. A sale that collapses at week ten because the title documents weren't ready is a sale you couldn't afford to lose.
- Be realistic about time. Rightmove's national average is 64 days to find a buyer, and that's just the start. Conveyancing adds weeks. Our guide to property jargon explains the stages if the language is unfamiliar.
- Look at your buyer type. A buyer with a mortgage offer in principle is worth more than one who's still "looking at options". Ask.
- Consider the whole timeline of your own move. If you're buying onward, the same rate rises hit your purchase too.
When does a quick sale make sense?
Most people selling at a normal pace on the open market will be fine, if they price sensibly. But there's a group for whom a slower, mortgage-dependent market is a real problem: people who've already bought their next home, people facing a probate sale, people dealing with a separation, anyone whose mortgage deal is about to run out, or those who can't afford another quarter of two mortgages.
For them, buyers who don't rely on a mortgage become far more relevant. A cash house buyer isn't waiting on a lender's approval, which is the very thing that's slowing everything else down right now. The trade-off is that a fast sale generally means a discount to the open-market price, and that discount varies a lot between buyers. That's exactly why we suggest comparing several offers rather than accepting the first. Our sell house fast page walks through how that works and what's realistic.
I'm not saying rush into a quick sale. I'm saying know that it exists, know roughly what it would pay, and use it as a benchmark. If the open market is going to leave you waiting six months and paying two mortgages, that benchmark tells you what waiting is really costing.
Could the Bank of England raise rates, and what would that do?
Bank Rate has been held at 3.75% for six consecutive meetings. The Bank isn't hiking today. But reporting around the approvals figures noted that economists anticipate possible rises later in the year, and Matt Swannell's comment about markets shifting to expecting hikes says the same thing from the pricing side.
If you're a homeowner rather than a seller, this also matters. The average rate across all outstanding mortgages is 4.00%, up from 3.97%. Anyone on a fix that ends in the next year is likely to see their rate rise, and I'd urge you to look at remortgage options early: most lenders let you lock in a new deal several months ahead of your current one ending. Remortgage approvals slipped to 34,000 in August, a sign that some people are choosing to sit tight rather than switch.
What could shift the outlook for the rest of 2026?
Three things, in rough order of importance.
Inflation and the rate path. If inflation eases from 3.1%, expectations for rate hikes fade, fixed rates drift back down, and buyers' borrowing power recovers. If it doesn't, we are looking at a longer squeeze. Neither outcome is within your control, so plan for the cautious case.
The Autumn Budget. Buyers who are waiting will act one way or another once they know the tax position. Anthony Codling of RBC Capital Markets said "the market needs a boost, the Government knows it needs a boost, and the Government is doing something about it". That's one analyst's view, and I'd treat it as opinion rather than a forecast. But it does show the direction of the rumour mill. If there is a measure that helps buyers, expect a burst of activity after it. If it hurts, expect the opposite.
Whichever way it falls, don't build your selling plan on a rumour. Build it on what you can control: your price, your paperwork and your timescale.
Seasonality. The market usually goes quiet in December, and pushes again in January. If you can't get a sale agreed by mid-November, many sellers choose to wait until the new year rather than list into the dead weeks. That has its own risks, and it's a good reason to price properly now.
Are the experts agreed on what happens next?
No, and I'd be wary of anyone who sounds too certain. Katie Clinton at KPMG talks about affordability pressures continuing to weigh on demand. Anthony Codling at RBC expects a government-led boost. Zoopla's Richard Donnell sees well-priced homes selling all autumn. Those views don't contradict each other so much as describe different parts of the same slow market.
My reading is that we're in a choosy market rather than a collapsing one. Prices are roughly flat nationally (Zoopla has +0.9% over the year, Rightmove asking prices are -0.8%), with the north and Scotland holding up and London and the South East soft. The approvals data says the volume of transactions will be lower in the next quarter or two than it was in the first half of the year. Fewer sales at broadly stable prices is a very different beast from falling prices, and it calls for a different approach: patience and realism, not panic.
What should you do this week?
- Find out what your home is worth today, not what it was worth in spring. Start with our house valuation tool.
- Check what comparable homes near you have actually sold for, not what they're listed at. Our house prices page can help.
- If you're on a fixed mortgage deal that's ending within six months, look at your options now.
- Decide your deadline. When do you need to be sold, and what does it cost you per month to wait?
- Compare routes: open market, and if time matters, a quick sale. You'll only know what each is worth by seeing offers.
The bottom line
The August mortgage approvals number is a real signal but not a disaster. It says buyers are being squeezed by borrowing costs and are hesitating ahead of the Budget, and that the autumn will be slower than the optimists hoped in January. It doesn't say prices are about to crash. If you're selling, the winning approach is to price for the buyers who can actually get a mortgage today, get your paperwork tidy, and know your fallback.
If speed matters to you, or you'd simply like to see what your options are worth before committing to an estate agent for months, you can compare offers from cash buyers with a free valuation. No obligation, and you decide what to do with the numbers.
Don’t accept a lowball offer for your home
Compare genuine cash offers and investor options in minutes — free, no obligation, no fees.
