Net mortgage approvals for house purchases fell by 500 at the end of 2025, data from the Bank of England has revealed.
The data found approvals net of cancellations, an indicator of future borrowing, fell to 64,500 in November of last year.
In contrast, approvals for remortgaging rose by 3,200 to 36,600.
This contributed to net mortgage borrowing increasing by £0.3bn in November, a marked difference from the £1bn drop experienced in October.
As a result, net borrowing by individuals rose from £4.2bn to £4.5bn.
However, during the same period, gross lending decreased by £0.6bn to £23.7bn.
Knight Frank Finance managing partner, Simon Gammon, said: “Mortgage approvals for house purchases dipped again in November following a similar fall in October.
“While this was partly due to uncertainty in the lead up to the Budget, other indicators like the Nationwide house price index suggest that the property market had a soft end to 2025.
“Given all the noise in the run-up to the Budget, it looks like many buyers put plans on hold until after Christmas.
“That said, mortgage rates continued to ease through December, and anecdotal evidence from our brokers suggests that some pent up demand should be released as we move towards spring.
“The lenders begin the year with fresh targets and we expect the larger lenders to be most aggressive in cutting rates in the first weeks of January.”
A similar sentiment was expressed by Lifetime Wealth Management mortgage and protection specialist, Katy Eatenton, who said that 2026 “will start with a bang”.
“As reflected in the mortgage approvals data dipping, it was a sluggish end to 2025,” she explained.
“However, we believe 2026 will start with a bang as lenders come out fighting for business and cutting rates to achieve it.”
Additionally, the bank’s data revealed that the effective interest rate on newly drawn mortgages increased for the first time since February 2025 in November to 4.20 per cent.
This represented a rise on the 4.17 per cent that was recorded in April.
It also detailed that the rate on the outstanding stock of mortgages was 3.90 per cent in November, a rise from 3.89 per cent in the previous months.
tom.dunstan@ft.com
What’s your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com