Mortgage Approvals Rose in June as Borrowing Costs Hit Records

By Lisa Hayes · 4 August 2026

Here's the short version. Mortgage lending bounced back hard in June: households borrowed a net £7.7 billion against their homes, more than double May's £3.3 billion, and the number of purchase mortgages getting the green light crept up to 58,200, according to the Bank of England. That's the good news for anyone thinking of selling. The catch sits in the small print of the same release: the interest rate borrowers are actually paying has climbed to its highest in over a year, and the average rate across every outstanding mortgage in the country has hit a record 3.96%. Demand is nudging back. It's just paying a lot more to get through your front door.

I want to walk you through what the Bank's latest Money and Credit report really says, because the headlines went two very different ways on it. Some read it as "buyers are back". Others read it as "borrowing costs at record highs". Both are true at once, and the tension between them is exactly what you need to understand if your home is on the market this summer or about to be.

What actually happened to mortgage lending in June?

Every month the Bank of England publishes a report called Money and Credit. It's dry as a bone and it rarely leads the evening news, but it's one of the most honest gauges of the housing market we have, because it counts what people actually did with their money rather than what they told a survey they might do.

June's report, covering the month before the Bank's late-July rate meeting, showed a clear rebound. Net borrowing of mortgage debt, which is new lending minus repayments, rose to £7.7 billion. In May it had been a limp £3.3 billion. The six-month average was £4.9 billion, so June didn't just recover, it overshot the recent trend. Put plainly, more money moved into bricks and mortar in June than in any month since the spring.

Approvals for house purchases, which are loans agreed but not yet drawn down, rose to 58,200 from a revised 56,600 in May. Economists had pencilled in about 57,100, so the market did a touch better than the City expected. Approvals matter because they are a leading indicator: a mortgage approved in June tends to become a completed sale in August or September. So this number is, in effect, a preview of your autumn market.

Here's the two-sided part. Even after rising, 58,200 approvals is still soft by recent standards. It sits below the roughly 61,400 monthly average of the previous half-year and hovers near the lowest levels in about two years. So yes, the direction turned positive. No, we are not back to a busy market. We are back to a slightly-less-quiet one.

• £7.7bnnet mortgage borrowing in June (vs £3.3bn in May)
• 58,200house-purchase approvals, up from 56,600
• 34,200remortgage approvals, up from 33,800
• 3.96%record average rate on all outstanding mortgages

Why did borrowing jump so much when approvals barely moved?

Good question, and it trips a lot of people up. Approvals rose by fewer than 2,000. Net borrowing more than doubled. How does a small bump in the number of loans produce a huge jump in the pounds borrowed?

Two reasons. First, net borrowing captures the whole flow of money, including larger loan sizes and fewer repayments, not just the count of new deals. When house prices are higher, each mortgage is bigger, so the same number of buyers moves more cash. Second, and this is the human bit, May had been unusually weak. Approvals that month had plunged to a two-year low after the flare-up in the Middle East rattled markets and spooked buyers. June was partly a catch-up: deals that stalled in the panic of May got dusted off and completed once the immediate shock faded.

So the jump in borrowing is real, but some of it is a bounce off a low base rather than a fresh surge of confidence. If you want the honest read, June looks like a market steadying itself after a wobble, not one taking off.

The number that should worry sellers most

If I could get you to remember one figure from this release, it wouldn't be the £7.7 billion. It would be 4.35%. That's the effective interest rate on newly drawn mortgages in June, up from 4.22% in May, and the highest in more than a year, according to the Bank of England. The rate on the entire outstanding stock of mortgages, meaning what the country as a whole is paying, rose to a record 3.96%.

Read that again, because it's the quiet story of 2026. The base rate has been frozen at 3.75% all year. Yet the rate ordinary borrowers actually pay keeps grinding higher. That's because millions of households locked in cheap five-year fixes back in 2020 and 2021, and they are now rolling off them onto today's pricing. Every month, another tranche of people remortgages from a rate starting with a 1 or a 2 onto one starting with a 4 or 5. The average creeps up even though the Bank hasn't moved.

Mark Harris, chief executive of broker SPF Private Clients, put it bluntly in his reaction to the data: "The effective interest rate paid on new mortgages jumped again to 4.35% while the rate on the outstanding stock of mortgages rose to 3.96%." He added that on the ground, "mortgage rates have risen back to the same level seen a month ago amid renewed tensions in the Middle East," and warned that borrowers who'll need a mortgage soon "may want to consider securing a product sooner rather than later in case rates rise further."

Why does this matter to you as a seller rather than a buyer? Because your buyer's budget is set by their monthly payment, not by your asking price. When the effective rate ticks up, every buyer's borrowing power quietly shrinks. The person who could stretch to £320,000 in March can stretch to a bit less now, for the same salary. That ceiling is what caps offers, and it's why the market can have "returning demand" and "flat prices" in the same breath.

Measure (Bank of England)	May 2026	June 2026
Net mortgage borrowing	£3.3bn	£7.7bn
House-purchase approvals	56,600	58,200
Remortgage approvals (new lender)	33,800	34,200
Effective rate, new mortgages	4.22%	4.35%
Rate on outstanding mortgages	3.92%	3.96% (record)

How does this fit with everything else we've seen this summer?

The lending data doesn't sit in a vacuum, and it lines up neatly with the price indices. Nationwide reported that annual house price growth slowed to 1.8% in July, down from 2.2% in June, with prices essentially flat month on month and the average home valued at £277,542. Robert Gardner, Nationwide's chief economist, described market activity and prices as having "remained soft in recent months, in part reflecting the uncertain economic backdrop," and pointed the finger at geopolitics: "the conflict between Iran and the US again exerting upward pressure on energy prices and market interest rates in recent weeks."

So the picture hangs together. Buyers came back a little in June. Prices are barely moving. Borrowing costs are creeping up. That's not a boom and it's not a bust. It's a market in a holding pattern, waiting for the cost of money to come down before it does anything dramatic.

It also chimes with what happened at completion stage. HMRC's transactions figures showed the busiest June for completed sales since 2022, which fits the story of stalled spring deals finally crossing the line. Volumes are recovering faster than prices, which is precisely what you'd expect when buyers are cautious about price but still need to move for jobs, families and life.

Hanging over all of it is the Bank of England itself. At its late-July meeting the Monetary Policy Committee voted 6 to 3 to hold the base rate at 3.75%, with three members actually pushing to raise it to 4%. That's a hawkish hold, not a dovish one. The next decision lands on 17 September, and until then the market is stuck guessing. If you were hoping for a rate cut to light a fire under buyer demand this autumn, the minutes give you little to cling to.

Remortgaging is quietly picking up, and that tells its own story

One number in June's release gets overlooked and shouldn't. Approvals for remortgaging with a different lender rose to 34,200, up from 33,800. That's people at the end of a fixed deal choosing to move their loan to a new bank rather than roll onto their existing lender's rate.

Small movement, big signal. When remortgaging picks up, it usually means borrowers are actively shopping around because the stakes have got high enough to bother. Harris at SPF read it the same way: rising remortgage numbers suggest "borrowers may be shopping around for better rates rather than sticking with their existing lender when their current deal comes to an end." In a cheap-money era, plenty of people let their mortgage lapse onto a standard variable rate out of inertia. Nobody can afford that inertia at today's prices.

This is the 2026 remortgage squeeze in action, and it matters for the sales market too. Some homeowners hitting a much higher monthly payment will decide the sums no longer work, and they'll list. That adds to supply. Others will grit their teeth, refix and stay put, which keeps supply tight. Which way your local market tips depends on how stretched your neighbours are. If you're weighing up whether to sell or refinance and sit tight, it's worth reading our guide to the 2026 mortgage landscape before you commit either way.

What does a demand rebound actually mean if you're the one selling?

Let's translate the economics into your kitchen-table decision. The June data is mildly encouraging for sellers, with two firm caveats.

The encouraging part: approvals are a pipeline, and the pipeline refilled a bit in June. More approvals now means more buyers with finance agreed and ready to offer over the next couple of months. Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, said approvals rose "as demand holds up," and backed it with her own firm's figures: mortgage applications up 12.5% to 17,191 in June and lending up 14.3% to £3.44 billion. When a big broker's own application book is up double digits, that's real people getting real mortgages, not just a statistical blip.

The first caveat: this demand is price-sensitive to a degree we haven't seen in years. Buyers have finance, but the effective rate at 4.35% means their budgets are capped. They will walk from an overpriced home without a second viewing, because the monthly payment simply doesn't compute. Nathan Emerson, chief executive of Propertymark, welcomed the pick-up but was careful to note that approvals "remained below the average recorded over the previous six months, indicating that while confidence may be improving, activity has yet to fully recover."

The second caveat: it's one month. As Geddes rightly said, "One month's data is a snapshot, not the whole picture." June bounced partly because May slumped. Don't rebuild your expectations on a single data point.

Is now a good time to sell, or should you wait?

I get asked this every week, and my honest answer hasn't changed with June's data: the right time to sell is when it suits your life, and the way you protect yourself is on price and presentation, not on timing the market to the month.

Here's the case for acting now. Demand is steadier than it was in the spring. The autumn is historically the second-busiest selling season after spring, and the buyers approved in June and July are exactly the people who'll be viewing in September. If you list into that, you meet motivated buyers with finance in place. And crucially, prices are broadly flat, so waiting six months for "the market to recover" is a bet, not a plan, especially with three rate-setters wanting to hike.

Here's the case for patience. If your only reason to sell is to squeeze a higher price, the numbers say you'll be waiting a while, because with the effective rate rising, there's no obvious catalyst to push prices up this year. And if you're chain-dependent, a fragile market means more deals fall through, so you'll want your ducks in a row before you start. It's worth knowing the warning signs of a property chain that could collapse before you accept an offer that looks good on paper.

My rule of thumb: if you need to move, move, and win on pricing. If you're purely speculating on a higher number later, understand you're taking a real risk for an uncertain reward.

What should you actually do now?

Enough analysis. Here's what I'd do this week if I were selling into this market.

Price to today, not to last year. The single biggest mistake I see is anchoring to what a neighbour got in 2022. With annual growth at 1.8% and buyer budgets capped by a 4.35% effective rate, an ambitious asking price doesn't get you more money, it gets you no viewings and a stale listing. Homes that sit unsold for weeks end up selling for less, because buyers smell desperation. Get a grounded view of what your place is worth with our house valuation guide, and sanity-check any online estimate against real, recent local sales.

Understand your buyer's maths. Your buyer is thinking in monthly payments. A realistic price that lets them borrow comfortably will beat an optimistic one that pushes them past their affordability ceiling. If you want a wider view of where prices sit region by region, our UK house prices tracker lays out the trends without the estate-agent spin.

Get sale-ready before you list. In a cautious market, the smoothest, best-prepared sale wins. Have your paperwork, your solicitor and your Energy Performance Certificate lined up so you can move the moment an offer lands. Delays kill deals when buyers are nervous.

Know all your exit routes. The open market suits most people most of the time, but it isn't the only door. If speed and certainty matter more to you than chasing the last few thousand pounds, it's worth understanding how selling your house fast works, and whether a cash house buyer could give you the guaranteed completion date the open market can't. Just go in with your eyes open on price, and compare properly.

The outlook: where do rates and demand go from here?

Nobody can tell you exactly where mortgage rates land, and anyone who claims certainty is selling something. But we can map the forces at work, because they're not mysterious.

On the downside for rates: consumer price inflation eased further in June, and wage growth has continued to moderate. Both give the Bank of England more room to eventually cut, and Gardner at Nationwide noted these signs give "policymakers more breathing space." Emerson at Propertymark made the same point, that easing inflation should hand households "greater financial certainty." If that trend holds into the autumn, the September or November meetings could bring the first cut, and mortgage pricing tends to move ahead of the Bank once markets smell a change.

On the upside for rates: the Middle East. The Iran-US conflict keeps pushing energy prices around, and higher energy costs feed straight into inflation, which is the one thing that keeps the Bank's finger off the cut button. Household energy bills rose again from 1 July, adding to the squeeze. Three MPC members already want to hike. If another energy shock lands, cuts get pushed back and today's rates start to look like the floor rather than the ceiling.

For the housing market, that points to more of the same in the near term: modest, price-sensitive demand, flat-to-low single-digit price growth, and transactions recovering faster than values. Not exciting. But for a seller, a stable, functioning market where deals actually complete is a perfectly good backdrop, as long as you price into it honestly. The buyers approved in June are your autumn viewers. Whether they offer on your home comes down to how sensibly it's priced and how well it shows.

If you take one thing from June's numbers, let it be this: the market isn't frozen, but it isn't forgiving either. Demand is real, budgets are tight, and the homes that sell are the ones priced for the buyer who exists today, not the one who existed in 2022.

The smartest move before you commit to anything is simply to see what your home could achieve across different routes. Get a free, no-obligation valuation and compare your options side by side, from a full open-market listing to a guaranteed cash sale, so you can choose the path that fits your life and your timeline rather than the market's mood.

Figures in this article are drawn from the Bank of England's Money and Credit report for June 2026, with additional context from Nationwide's July House Price Index and the Bank of England's July monetary policy decision. Data is accurate as reported; individual mortgage rates and property values vary, so treat national averages as a guide, not a promise.