Mortgage approvals rose in June. So did what buyers pay.

The Money and Credit release is the Bank of England's monthly count of how much households borrowed and how many mortgages lenders agreed. It is the closest thing the market has to a headcount of buyers who have cleared the affordability checks, which is why sellers should read it even though it never mentions house prices.

What did the Bank of England actually report?

Five figures matter to anyone selling this summer. Approvals went up, borrowing went up sharply, and the cost of the money went up with them.

The effective interest rate is the average rate borrowers actually ended up paying on the mortgages they took out that month. It is not the same as the lowest advertised rate, and the gap between the two is the whole story in this release.

Why did approvals rise while the rate buyers pay went up too?

Headline rates and average paid rates move for different reasons. A lender can advertise a sub-4% deal that only a buyer with a 40% deposit and a clean file can reach, while the typical buyer takes something well above it.

• The cheapest advertised deals usually carry the lowest loan-to-value bands and the highest arrangement fees, so most buyers do not qualify for them or do not choose them.
• The mix shifts. When more first-time buyers with smaller deposits complete, the average rate paid rises even if no lender changed a single price.
• The rate on the whole outstanding stock hit 3.96% in June, a record high, because people are still rolling off fixes agreed when money was cheaper.
• Net borrowing of £7.7bn in June against £3.3bn in May shows a large volume of drawdowns landing at once, which is a completion effect from offers agreed earlier in the spring.

What does this mean if I am selling right now?

It means the pool of buyers who can actually borrow is steady rather than growing, at a moment when the number of homes competing for them is not. Rightmove reported on 20 July 2026 that average asking prices fell 1.0% over the month to £372,359, which is a far bigger July fall than the usual seasonal dip.

• Approvals at 58,200 are still below the six-month average of about 61,400, so demand is holding, not recovering.
• A buyer's offer is capped by the rate they were offered, which in June averaged 4.35%, not by the lowest rate in a comparison table.
• Pricing above the evidence is the expensive mistake in this market. Buyers who scrape through affordability at 4.35% have no headroom to stretch.
• The buyers who do come forward are better qualified than they look, because the affordability check they passed was done at today's cost of money.

How do I read a buyer's borrowing power properly?

Ask for evidence of what the buyer has been offered, not what they hope to get. A mortgage in principle is a lender's provisional statement of what it would lend, based on a credit check and the figures the buyer gave. It is useful, and it is not an offer.

• Ask which lender, what deposit, and whether the mortgage in principle is dated within the last three months.
• Ask whether the rate they were quoted is fixed and for how long, because a buyer waiting for a cheaper rate is a buyer who may pause your sale.
• Treat a buyer who has already paid a broker and booked a valuation as more committed than one who has only browsed rates.
• Keep your own moves in step with theirs. Instructing a solicitor early is cheap and keeps momentum, but the larger spends and the decision to come fully off the market are better held back until the buyer has committed their own money.

A buyer's borrowing power is set by the rate they were offered, not the rate in the advertisement. Price to the first number, not the second.

What else should a seller take from this release?

Where does this leave your asking price?

The number to get right is the one you set at the start, because a home that launches above what buyers can borrow spends the summer collecting viewings and no offers. The way to test it is to see what more than one local agent will put in writing, side by side, before you commit to any of them.

ValuQ is a platform that gives UK homeowners free, side-by-side property valuations from competing local estate agents. Sellers stay anonymous until they choose to connect, so comparing the numbers costs nothing and starts no phone calls.