UK lenders approved more mortgages than expected in June, while remortgaging go-aheads reached their highest monthly total in more than two-and-a-half years, according to Bank of England figures.

Net mortgage approvals climbed by 900 to reach 64,167 in June. Approvals for remortgaging, which only captured remortgages with a different lender, also increased by 200 to 41,800 in the month. This marked the highest number of approvals for remortgaging since October 2022, when there were 50,000.

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The strong figures suggest that the UK housing market has regained its footing, after a tax break for homebuyers ended in April.

Nathan Emerson, CEO of Propertymark, said: “This is a positive sign at a time when there is a poor economic outlook in general and potential tax rises on the way.

Read more: First-time buyers on £30k salary now able to apply for mortgage

“The chancellor’s recent Leeds Reforms sent a positive signal to the mortgage market, which should encourage many lenders to focus new products and services towards those on lower incomes to help them take their first step onto the housing ladder.”

Net borrowing of mortgage debt by individuals climbed by £3.1bn to £5.3bn in June, compared to a £2.8bn increase to £2.2bn in May. The annual growth rate for net mortgage lending increased from 2.6% to 2.8%.

Gross lending reached £23.9bn in June, up from £20.6bn the previous month, while gross repayments also increased to £18.8bn from £17.6bn.

The effective interest rate on newly drawn mortgages fell for the fourth consecutive month, reaching 4.34% in June from 4.47% in May. In contrast, the rate on outstanding mortgage balances rose slightly to 3.88% from 3.87%.

Jason Tebb, president of OnTheMarket, said there were signs that affordability continued to ease, adding that four base rate reductions in the past year had helped, as well as relaxed lending rules and criteria.

Tebb explained: “With buyers having to fund higher stamp duty costs since the end of the concession, further rate reductions would provide welcome impetus for the market as we head into the autumn.”

The Bank of England left interest rates on hold at 4.25% in June but is widely expected to cut them to 4% in its 7 August meeting, which should provide further relief to UK households.

Matt Swannell, chief economic advisor to the EY ITEM Club, said: "Stepping back from the policy-induced volatility, the outlook for housing market activity remains relatively subdued. Interest rates are expected to fall further this year and into next. However, despite some progress in recent years, most housing and mortgage affordability metrics remain stretched, so the recovery in activity and prices will likely be gradual in the second half of 2025 and into 2026.

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Lucian Cook, head of residential research at Savills, said: “Changes in the way mortgage regulations are being applied have the capacity to free up more mortgage lending among both first-time buyers and home movers, especially as we see further interest rate cuts.

Read more: Average rent surges to £2,712 in London and £1,365 across UK

“We anticipate that mortgaged buyer demand will pick up gradually, heading into early autumn. However, for momentum to truly build, households must feel more confident not only in their personal finances but also in the broader economic environment.”

Looking at non-mortgage borrowing, the annual growth rate for consumer credit increased to 6.7% in June, from 6.5% in May.

Within this, the annual growth rate for credit card borrowing rose to 9.7%, from 9.3%.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “While June’s uncertainty in the domestic and global economy may have encouraged some savers to top up their savings to protect their finances, others may have been trying to capitalise on higher savings rates while they were still around.”

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