Mortgage approvals hit their lowest since 2023. What now?

What did the Bank of England report?

A mortgage approval is a lender's agreement to lend for a specific purchase, counted before the loan is drawn. Economists watch it because it runs a month or two ahead of completed sales. In August 2026 approvals for house purchase fell to 54,900, below an average of around 60,100 over the previous six months, according to the Bank of England's Money and Credit release on 29 September.

Property Industry Eye reported on 30 September that August's figure is the lowest since December 2023 and the fourth consecutive month under 60,000. Net borrowing rose slightly, which reflects loans approved earlier in the summer completing, not fresh demand.

Why are fewer buyers getting mortgages?

The short answer is price of money. Bank Rate has been held at 3.75% since December 2025, but at the 17 September meeting three of the nine Monetary Policy Committee members voted to raise it to 4%. Lenders price fixed rates off expectations, so they moved first.

• Nationwide, Virgin Money and TSB all raised rates in the last week of September, Property Industry Eye reported on 30 September.
• The cheapest two-year and five-year fixes from several major lenders now sit at or just above 5%, against deals near 3.5% on offer in January and February 2026.
• Zoopla puts the average mortgage rate at 5.2%, a three-year high, adding about £150 a month to a typical repayment compared with the start of the year.

A buyer who was approved in principle in the spring may now be able to borrow less, or pay noticeably more each month for the same loan. That is the group missing from August's figure.

How much more does a typical buyer now pay each month?

To make the rate move concrete, ValuQ worked out the monthly repayment on a 75% mortgage against Zoopla's September average UK price of £273,000, which is a loan of £204,750 over 25 years on a repayment basis.

An extra £196 a month is £2,352 a year. Lenders test affordability against that monthly cost, so a buyer on the same salary qualifies for a smaller loan than they did in the spring.

What does this mean if I am selling now?

It means competition for fewer buyers. Rightmove's September index, published on 21 September, found the number of homes for sale at a 12-year high, with buyer enquiries and agreed sales both 9% below last year. Zoopla's September index, reported on 30 September, puts annual price growth at 0.8% and stock 5% higher than a year ago.

• Asking prices still rose 0.7% in September to £367,440 on Rightmove, so the market is slow, not falling apart.
• Houses are up 1.3% over the year on Zoopla's figures, while flat prices have now fallen for 15 months in a row.
• A quarter of homes listed in September had already been on the market in the past year, and six in ten of those returned at a lower asking price.

In a market with more sellers than borrowers, the first price you set does most of the work.

What should sellers do differently this autumn?

1. 1. Price from sold evidence

   Base your asking price on what comparable homes near you have actually sold for this year, not on last spring's asking prices or the highest valuation you were given.

2. 2. Ask where each buyer's mortgage stands

   Find out whether a buyer holds only a mortgage in principle, has submitted a full application, or has a formal offer with a clear expiry date.

3. 3. Move in step with your buyer

   Instruct your own solicitor early, but hold back larger spends and any decision to take your home off the market until your buyer has put money into the purchase.

4. 4. Compare before you commit

   Get more than one professional view of your price so you know what is realistic before a single buyer asks for money off.

ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents, and agents never get your details until you choose. In a month like this, seeing several local views of your price on one screen is the quickest way to find the number buyers can actually borrow against.

Are mortgage rates likely to fall again soon?

Nobody can promise that. The Bank of England said on 17 September that the risk of higher inflation had grown because of energy prices, and three committee members wanted an immediate rise. The next decision is due in November. Sellers who wait for cheaper mortgages are betting on a forecast; sellers who price for today's buyers are working with what is in front of them.