Finance
UK mortgage approvals fall to six-month low ahead of purchase tax rise
Published by Global Banking and Finance Review
Posted on March 31, 2025
2 min readLast updated: January 24, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on March 31, 2025
2 min readLast updated: January 24, 2026
UK mortgage approvals fell to a six-month low in February, linked to upcoming tax increases. Consumer lending growth remains slow, according to Bank of England data.
(Reuters) -British mortgage approvals cooled to a six-month low in February ahead of a rise in transaction taxes on many house purchases while consumer lending grew at the joint-slowest pace in nearly three years, Bank of England data showed on Monday.
Lenders approved 65,481 mortgages in February, down from 66,041 in January. This was the lowest number since August and just below the median in a Reuters poll of economists which had pointed to approvals of 66,000.
Net unsecured lending to consumers increased by slightly more than expected, up 1.358 billion pounds ($1.76 billion) in February after a 1.701 billion pound increase in January.
On an annual basis, consumer lending growth matched January's 6.4% rate, which was the lowest since May 2022.
Matt Swannell, chief economic adviser to the consultancy EY ITEM Club, said slowing mortgage approvals reflected an unwinding of a boost late last year, when homebuyers sought to purchase homes ahead of an increase in property transaction taxes in April.
"In the near term, (this) will continue to drag on mortgage activity," he said.
In the three months to the end of February, net mortgage lending - which reflects completed transactions - grew at the fastest pace since the three months to the end of November 2022, when former prime minister Liz Truss' aborted budget plans led to mortgage lending drying up.
While net consumer lending increased at a slower pace in February, analysts said the better-than-expected monthly increase chimed with strong retail sales data.
"Overall, the data is in line with a picture of a slow, gradual improvement in consumer spending, which should help push (economic) growth up to 0.3% quarter-on-quarter in the first quarter," said Thomas Pugh, economist at accountancy firm RSM.
($1 = 0.7729 pounds)
(Reporting by Andy Bruce; editing by David Milliken, William Maclean)
The main topic is the decline in UK mortgage approvals to a six-month low due to upcoming property tax increases.
Consumer lending grew at the slowest pace in nearly three years, with a slight increase in net unsecured lending.
Despite slow lending growth, economic growth is expected to improve to 0.3% in the first quarter.
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