UK mortgage approvals jump in April

(Sharecast News) - Mortgage approvals unexpectedly spiked in April, data from the Bank of England showed on Tuesday.

According to the central bank's latest monthly Money and Credit Report, there were 65,945 net mortgage approvals for house purchases in April. The highest figure since January 2025, it was comfortably above both the six-month average, of around 63,100, and March's 63,979.

Consensus had been for a decline to around 61,700.

Net borrowing of mortgage debt - which reflects completed house purchases and lags approvals - fell from £6.8bn to £4.4bn, however, the lowest since October 2025. The effective interest rate - the actual interest paid - on newly drawn mortgages increased to 4.08% from 4.03%.

Despite starting the year on the front foot, the UK housing market has started to faltered in the wake of war in the Middle East. Global energy prices have been sent soaring, consumer sentiment has weakened and mortgage rates have risen. Interest rates have so far been left on hold, but at least one rise this year is widely expected by markets.

Paul Dales, chief UK economist at Capital Economics, told Reuters that homebuyers had likely pulled planned house purchases forward ahead of any further rises in borrowing costs.

He continued: "If so, mortgage approvals would soon fall back. That would certainly fit more comfortably with other indicators that show housing market sentiment has soured since the war triggered a jump in mortgage rates."

The report also showed that net borrowing of consumer credit was largely unchanged at £1.9bn in April, in line with the six-month average. Within that, net borrowing on credit cards rose to £0.8bn from £0.7bn, while borrowing through other forms of debt - such as car dealership finance and personal loans - declined.

Household deposits with banks and building societies, meanwhile, increased to £5.8bn from £5.6bn in March.