Published by Barnali Pal Sinha
Posted on February 23, 2026
3 min readLast updated: April 2, 2026
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In November 2025, UK mortgage approvals dipped and effective mortgage rates ticked up slightly, contrasting earlier periods of easier lending and lower rates that supported property prices. The market has since cooled, with growth slowing.
There are numerous factors that have influenced the rise and fall of house prices across the UK, with a primary cause being the Bank of England’s mortgage approval rate. In November last year, mortgage approvals dropped, but interest rates stabilised.
Last year, interest rates levelled out. Market trend analysis also saw an increase in the number of people who were looking to buy their 'forever home' earlier, rather than making multi-stage ladder purchases. Even though affordability is a key factor determining whether someone can afford a home, lenders expanded their offerings to try to reflect the interest rates at the time.
Also, data from recent years suggests the number of products available on the market has risen. This has helped buyers, especially those who are buying a house for the first time, secure a place on the property ladder.
Over the last few years, there has been an increase in mortgage providers offering more substantial loans to buyers. Some have cited this as a result of individuals researching online for mortgages rather than going to traditional establishments. In this age, buyers have displayed the convenience of finding mortgage deals online and the benefits of offering a more diverse selection of packages.
According to previous trends, more individuals are also choosing to sell their property online rather than proceeding with traditional estate agent services. The appeal of selling online is primarily cited as the ability to sell your house fast due to a lack of chains. Although trends like this tend to ebb and flow and are no indicator of future property performance, they highlight how online processes have influenced traditional markets.
A similar market shift can be seen in online banking. More people are using mobile banking when compared to traditional cash purchases. Instead of accessing support services through a physical branch, these services can now be widely accessed online. Changes such as these show the financial sector has undergone a rapid transformation to try to cater to the changing needs of the public.
Modern-day properties also offer lower running costs in comparison to older properties. Over the last ten years, a considerable number of energy-efficient properties have entered the market, largely due to advances in material technology and new building processes. More effective insulation, combined with greener building practices and faster construction methods, means that properties can reach the market faster and with greater Energy Performance Certificate (EPC) scores.
Analysis of EPCs from the Office for National Statistics shows that in March 2013, properties had a median rating of 82, but in March 2025, this increased to 84. Though historically, the market has seen a preference towards greener properties, it’s now clear that property developers have been following the trend closely. This can be seen in an increase in the number of energy-efficient properties hitting the market before March 2025. With that said, historically, energy-efficient properties do command a higher market price due to the more expensive materials needed to ensure optimal results.
Mortgage approvals for house purchase dropped by about 500 to 64,500, reflecting cooling demand amid cautious lending conditions and affordability concerns, per Bank of England data.
The effective interest rate on newly drawn mortgages increased slightly in November 2025 to 4.20%, up from 4.17% in October.
Earlier periods of lower interest rates and flexible lending boosted mortgage affordability and approvals, supporting stronger house price growth before the late‑2025 slowdown.
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