Mortgage approvals are the earliest reliable signal of what the UK housing market is about to do. Every month the Bank of England publishes how many mortgages lenders agreed for house purchase and for remortgaging, and because an approval comes months before completion, the number turns before house prices, transaction volumes and lender pricing do. The chart on this page plots both series against Bank Rate. Mortgage One is a whole of market mortgage adviser that reads approvals data alongside lender appetite when timing a purchase or a remortgage.

If your own move depends on whether lenders are opening up or pulling back, call 01202 155992 or contact Mortgage One.

What the chart shows and how to read the two lines

The teal line is monthly approvals for house purchase. The amber line is approvals for remortgaging. The stepped white line is Bank Rate on the right-hand axis. All three come from the Bank of England Money and Credit release, published monthly. The dashed section is a market-implied rate path, not a forecast of approvals.

Bank of England Money and Credit release, published monthly

Money and Credit lands towards the end of each month and covers the month before, so the series always runs about four weeks behind the live market. That lag matters less than it sounds, because approvals are already a forward-looking measure. The current readings sit in the stat tiles beneath the chart, alongside the twelve month change and the ten year average for house purchase.

Plotting Bank Rate on the same canvas is the point of the chart. Read the two together and the relationship is visible without any statistics: approvals sag as Bank Rate climbs and recover as it settles, with a delay of a few months in each direction. The dashed continuation of the rate line is the market-implied path, included for context only. No projection of approvals is shown, because approvals depend on lender appetite and buyer confidence as much as on rates.

Use the range controls to move between one, two, five and ten year windows or the full history. The full history is the view worth opening first, because the two shocks that shaped the current market are only legible at that scale.

For where the market expects Bank Rate itself to go, see the Mortgage One interest rate forecast. For what lenders are actually charging across each loan-to-value band, see the UK mortgage rates chart.

Why mortgage approvals lead the housing market by months

An approval is a firm offer, not an enquiry. The Bank of England describes net approvals for house purchase as an indicator of future borrowing. Completion typically follows two to three months later, so approvals turn before transaction volumes, before lender pricing responds and before house price indices register the change.

The sequence is worth holding in mind because most housing market commentary reports it backwards. A buyer decides, offers, gets an agreement in principle, applies, and is approved. Only then do the searches, the survey, the enquiries before contract and the chain resolve into a completion. Every stage after approval is administrative rather than economic, which is why the approval is the moment the decision actually gets made and the completion is merely when it gets recorded.

House price indices sit even further back in the queue. The lender-based indices are built on completions, so they describe a market that existed a quarter earlier. When approvals and a price index disagree, approvals are describing now and the index is describing the spring. Treating them as two views of the same moment is the single most common error in housing market coverage.

The same logic applies in reverse when you are the one buying. An offer in hand is worth more than a favourable headline, which is why first-time buyers who get their finance settled early consistently transact more smoothly than those waiting for a better month.

Why the remortgage line understates what is happening

Because it counts only part of the market. The Bank of England states that approvals for remortgaging only capture remortgaging with a different lender. Every borrower who stays put and takes a new product from their existing lender is invisible in this series, and internal product transfers account for a substantial share of all refinancing.

This is the detail that separates informed commentary from the rest. When a headline says remortgaging has fallen, it may mean fewer people refinanced, or it may mean the same number refinanced but more of them stayed with their existing lender. Those are opposite stories about lender competition and the published number cannot tell them apart.

The distinction has widened over the last decade. Lenders built slick internal switching journeys precisely because retaining a borrower costs a fraction of acquiring one, and a product transfer needs no new affordability assessment, no valuation and no legal work. A borrower who would once have moved lender now often clicks through an app in ten minutes. The remortgage approvals line captures none of that.

The practical read is that a falling remortgage line signals weaker inter-lender competition rather than a quieter refinance market. Anyone reviewing their own options should weigh a product transfer against a full remortgage on total cost, not on which route the statistics happen to record.

Why do mortgage approvals fall when rates rise?

Because affordability tightens at the point of application. A higher rate reduces the maximum loan a given income supports, so some buyers drop out and others buy less. Approvals therefore fall within weeks of a rate move, well before completions or prices react, and they recover on the same short lag.

The mechanism runs through the stress test rather than the headline rate. Lenders assess whether you could still pay if rates rose from here, so the rate they underwrite at is higher than the rate you are offered. When market rates move up, the stress rate moves with them and the maximum you can borrow falls faster than the payment rises. A borrower who qualified comfortably in one quarter can be short in the next without their income changing at all.

Rate expectations matter as much as rate decisions, which is why approvals often move ahead of the Bank of England rather than after it. Fixed pricing is set off swap rates and the lender margin over them, and swaps move on expectation. By the time a decision is announced, the approvals response to it is frequently already underway.

Whether tighter conditions actually change what you can borrow depends on your income shape and deposit rather than on the market average. To find out where you stand rather than where the market stands, call 01202 155992 or contact Mortgage One.

How approvals behaved through the 2020 and 2022 shocks

Both shocks show the same shape, a collapse followed by an overshoot. Approvals fell close to zero in spring 2020 when the market was legally shut, then spiked above every pre-pandemic month once the stamp duty holiday landed. After the September 2022 mini-budget they roughly halved within four months.

The 2020 episode is the cleaner experiment because the cause was administrative rather than economic. Viewings were banned and surveyors could not enter properties, so approvals stopped for reasons that had nothing to do with appetite or affordability. The rebound was correspondingly violent. Demand had not disappeared, it had been queued, and the stamp duty holiday released it into a market with no capacity to absorb it.

The 2022 collapse was the opposite, a genuine repricing of what borrowers could afford. Fixed rates repriced faster than incomes could adjust, the stress test moved with them, and a cohort of buyers who had been viable in the summer were not viable by the winter. Recovery took far longer than in 2020, because nothing was released when conditions eased. Those buyers had to requalify at the new numbers.

Read together the two episodes give a useful rule. When approvals fall because transacting is blocked, they snap back. When they fall because borrowing capacity has been repriced, they grind back. Which of the two is happening tells you far more about the year ahead than the size of the fall itself.

What do approvals tell you about your own timing?

Less than you might hope, and something genuinely useful. Approvals describe the market you are entering, not your own case. Rising approvals mean lenders have appetite but service levels come under strain, so offers take longer to issue. Falling approvals mean quieter underwriting queues and often sharper pricing to win the business that remains.

Service is the part borrowers underestimate. A lender running at capacity will quietly widen its margin to slow the flow, push turnaround times out from days to weeks, and become noticeably less flexible on anything that needs a human decision. The same lender in a quiet month will look at a case it would have declined at the peak. Timing an application into a quieter window can matter more than a small difference in headline rate, particularly on a case with anything unusual in it.

None of that argues for waiting. Approvals are a description of conditions, not an instruction, and the cost of missing your own deal expiry always exceeds the benefit of a marginally better market. The useful move is to know which environment you are applying into and to prepare the case accordingly.

Using, citing and reproducing this data series

The full series is free to download and free to reproduce with attribution. The file carries the month, approvals for house purchase, approvals for remortgaging and Bank Rate. Every figure is Bank of England published data, and each month is a settled historic value that does not change.

Use the Download the data (CSV) link beneath the chart for the complete series. The approvals and Bank Rate figures are published by the Bank of England in the Money and Credit release. The chart footer carries the date the data runs to.

To cite this page:

Mortgage One, UK Mortgage Approvals, https://www.mortgageonefinance.co.uk/uk-mortgage-approvals, accessed [date].

The chart may be reproduced in articles, research and presentations provided Mortgage One is credited and the page is linked. No permission request is needed. If you need a current copy, a different format, a longer history or the buy-to-let split, email enquiry@mortgageonefinance.co.uk or call 01202 155992 and we will send it.

If you are weighing a purchase or a remortgage rather than studying the market, the only number that matters is your own. For a free initial consultation on what you can borrow and what it would cost, call 01202 155992 or contact Mortgage One.

Back to Mortgage Guides

The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you’d like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.

FAQs

1. What are UK mortgage approvals?

Mortgage approvals are the number of mortgages lenders formally agreed in a given month. The Bank of England publishes them monthly in its Money and Credit release, split between approvals for house purchase and approvals for remortgaging. An approval is a firm offer rather than an enquiry or an agreement in principle.

2. Do mortgage approvals include remortgaging with the same lender?

No. The Bank of England states that approvals for remortgaging only capture remortgaging with a different lender. Internal product transfers, where a borrower takes a new deal from their existing lender, are excluded entirely. The published remortgage figure therefore understates how many people are actually refinancing.

3. Is a mortgage approval the same as a mortgage offer?

In this data, effectively yes. An approval means the lender has committed to lend on that case. It is not the same as an agreement in principle, which is a soft indication given before underwriting. Approvals count firm commitments, which is what makes them a reliable forward signal.

4. How often are UK mortgage approvals published?

Monthly. The Bank of England publishes the Money and Credit release towards the end of each month, covering the month before. That gives a lag of roughly four weeks between the period measured and the data appearing, which is fast by the standards of housing market statistics.

5. Do mortgage approvals predict house prices?

They lead them, which is not quite the same thing. Approvals precede completions by two to three months, and the main house price indices are built on completions, so approvals turn first. They indicate the direction of transaction volumes more reliably than they indicate the size of any price move.

6. Why do mortgage approvals fall when interest rates rise?

Because lenders stress test affordability at a rate above the one you are offered. When market rates rise the stress rate rises too, so the maximum loan a given income supports falls. Some applicants no longer qualify and others reduce their budget, and approvals drop within weeks rather than months.

7. What is a normal level of monthly mortgage approvals?

In settled conditions house purchase approvals have generally run somewhere between 60,000 and 70,000 a month. Readings well below that range point to constrained affordability or blocked transacting, and readings well above it usually reflect a stimulus or released pent-up demand rather than underlying strength.

8. Do falling approvals mean it is harder to get a mortgage?

Not necessarily, and sometimes the opposite. Falling approvals usually mean fewer people are applying, not that lenders have tightened. A quieter market often brings shorter underwriting queues, sharper pricing and more willingness to look at cases with something unusual in them. The constraint is normally affordability, not lender appetite.