In a welcome shift for the UK housing market, mortgage approvals have risen for the first time this year, signalling improving conditions for first time buyers and home movers. According to the latest data from the Bank of England, 63,000 mortgages were approved in May 2025—a jump of 2,400 from April.
✅ What’s Behind the Increase?
There are several factors contributing to this unexpected boost:
- Stabilising Interest Rates: Average new mortgage rates dipped to 4.47%, their lowest level in over a year. This comes as markets anticipate a potential Bank of England rate cut as early as August.
- Resilient Demand Post-Stamp Duty Change: Despite the reintroduction of pre-2022 stamp duty thresholds in April (which increased upfront costs), buyer interest hasn’t waned.
- Rise in Remortgaging Activity: Remortgage approvals also rose significantly—up 6,200 to reach 41,500, the biggest monthly increase since February 2024.
🏡 What Does This Mean for Buyers and Sellers?
For buyers, the slight drop in rates combined with increased approval volumes could make this summer an opportune moment to enter the market before any potential price rises or further policy changes.
For sellers, improved buyer sentiment may translate into faster sales and less downward pressure on pricing, especially in traditionally competitive areas.
🔮 What’s Next?
All eyes are now on the Bank of England’s next monetary policy decision. Should a rate cut materialise in August, it could further stimulate mortgage demand and drive continued housing market recovery into the second half of 2025.
📌 Key Takeaways:
- First rise in UK mortgage approvals this year: 63,000 in May 2025.
- Remortgaging activity also surged: +6,200 approvals.
- Average new mortgage rate: down to 4.47%.
- Market expects BoE rate cut in August.
- Buyer confidence and affordability improving.
🔑 My biggest tip? Speak to a mortgage adviser as early as possible if your thinking of buying your first home or moving house.
If you want to speak to me please feel to contact me on 0777 587 4126 or email me on daniel@middletonfinance.co.uk
The information contained within was correct at the time of publication but is subject to change.
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