Banks and building societies approve 65,945 home loans, up from 63,979 in March and the highest number since January last year
Published Wed, Jun 3, 2026 · 03:46 PM
[LONDON] UK mortgage approvals unexpectedly rose in April as the housing market displayed ongoing resilience to the economic fallout from war in Iran.
Banks and building societies approved 65,945 home loans, up from 63,979 in March and the highest number since January last year, Bank of England (BOE) data showed on Tuesday (Jun 2). Economists had expected 62,000 approvals.
The increase possibly reflects a rush to lock in loans in anticipation of further increases in interest rates. Economists are sceptical that demand will hold up, with house price figures this week suggesting the sector lost significant momentum in May.
The property market started the year on a strong footing as aspiring buyers shrugged off fears of tax rises. Conflict in the Middle East has radically upended that outlook, however.
Expectations of rate cuts have flipped into expectations of rate rises as BOE officials fight off price pressures from global energy supply disruptions. The war in Iran has left the UK exposed to a second cost-of-living crisis in less than five years, as the country relies heavily on energy imports.
At 5.67 per cent, the average two-year fixed mortgage rate remains almost 0.9 percentage points higher than in late February, before the United States and Israel launched strikes on Iran, Moneyfacts data show.
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“Whether momentum slows meaningfully will depend on how long the conflict persists and whether domestic political developments place further upward pressure on borrowing costs,” said Simon Gammon, managing partner at Knight Frank Finance. “Lender margins remain extremely thin, leaving little room for manoeuvre should market volatility return or the conflict continue for longer than investors currently expect.”
Consumer credit was unchanged at £1.9 billion (S$3.3 billion) in April, the BOE said.
Within this total, credit card borrowing increased marginally to £800 million, while borrowing through other forms of consumer credit, such as car finance and personal loans, fell to £1 billion from £1.2 billion in March. BLOOMBERG
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