Fewer mortgages were approved in Britain last month than in any month since December 2023. Just 54,900 house purchase mortgages got the green light in August 2026, according to the Bank of England. That is not a blip. It is the clearest sign yet that higher borrowing costs are reshaping who can buy, when they buy, and how much they can offer. For anyone watching the property market in Kingston upon Thames and the wider South West London area, this UK mortgage approvals lowest since 2023 figure matters because it signals a market where buyers have more room to negotiate and sellers need sharper, evidence-based pricing.
This article breaks down what the Bank of England's latest data actually shows, why approvals keep sliding, what housing economists are saying, and what it practically means if you are buying, selling, or remortgaging in Kingston this autumn.
Key Takeaways
- UK mortgage approvals for house purchase fell to 54,900 in August 2026, down from 55,900 in July and the lowest monthly total since December 2023.
- The effective interest rate on newly drawn mortgages rose to 4.6%, up from 4.45% the previous month, while average two-year fixed rates reached 5.29% according to Rightmove.
- London homes are taking an average of 78 days to find a buyer, and only 42% of London listings secure one, per Rightmove data from 21 September 2026.
- Zoopla reports London prices down 1% year on year, UK sales agreed down 9%, and unsold stock at its highest level in 12 years.
- With buyers negotiating harder and lenders scrutinising affordability closely, an independent survey gives both buyers and sellers the evidence needed to agree a fair price.
What the Bank of England's August 2026 Money and Credit Data Shows
The Bank of England's Money and Credit release, published on 29 September 2026, paints a picture of a mortgage market losing momentum. Mortgage approvals for house purchase dropped to 54,900 in August, down from 55,900 in July. That is the lowest reading since December 2023, and it sits well below the six-month average of roughly 60,100.
Remortgaging approvals also softened, falling to 34,000 in August from 34,600 the month before. Fewer homeowners are locking in new deals right now, which may reflect both fewer attractive rates on offer and a wait-and-see attitude among existing borrowers.
The cost of borrowing is rising too. The effective interest rate on newly drawn mortgages climbed to 4.6% in August, up from 4.45% in July. That increase may look small on paper, but it adds real pounds to monthly repayments across the term of a loan.
Zooming out further, the average rate across all outstanding mortgage debt in the UK is now about 4%. That is double the roughly 2% rate borrowers were paying in December 2021. For households who fixed their mortgage during the ultra-low-rate years and are now remortgaging, the jump in monthly costs can be substantial.
Elsewhere in the data, consumer credit net borrowing rose to £2.5bn in August, up from £2.1bn in July, suggesting some households are leaning more on credit cards and loans. Meanwhile, household deposits increased by £4.7bn in August, up from £3.8bn in July, which points to some families choosing to save rather than spend or invest in property right now.
Mortgage and Credit Figures at a Glance
| Metric | July 2026 | August 2026 |
|---|---|---|
| House purchase approvals | 55,900 | 54,900 |
| Remortgage approvals | 34,600 | 34,000 |
| Effective rate on new mortgages | 4.45% | 4.6% |
| Consumer credit net borrowing | £2.1bn | £2.5bn |
| Household deposits (net flow) | £3.8bn | £4.7bn |
Why Approvals Are Falling: Rates, Affordability and Confidence
Three forces are combining to push the UK mortgage approvals lowest since 2023 figure even lower: rising rates, stretched affordability, and cautious confidence.
Rates have climbed quickly. The effective rate on newly drawn mortgages has moved from 4.45% to 4.6% in a single month. Over a longer horizon, the shift is starker still. Rightmove's data from 21 September 2026 shows the average two-year fixed rate at 5.29%, up from 5.09% just a month earlier.
Affordability is being tested. With average outstanding mortgage rates now around 4%, double where they stood in December 2021, monthly repayments have risen sharply for anyone refinancing or buying new. Lenders apply strict affordability checks, and higher rates mean many buyers qualify for smaller loans than they would have a few years ago.
Confidence is fragile. Buyers who are unsure about their job security, savings buffer, or future rate movements are simply choosing to wait. That hesitancy shows up directly in approval numbers, because a mortgage approval reflects a real decision to proceed, not just browsing.
What the Experts Are Saying
Housing economists have been quick to connect the dots between rates, demand and the slowdown in approvals.
Katie Clinton of KPMG UK said a further fall in mortgage approvals in August points to affordability pressures continuing to weigh on housing demand.
Matt Swannell of the EY Item Club said quoted rates on new mortgages have risen from around 4% to 5% over the past six months.
Lucian Cook of Savills said upsizers are putting off plans to move until they have more confidence in their personal finances.
Taken together, these views reinforce the same story. Rates have moved up fast, affordability is tighter, and many buyers, particularly those looking to upsize, are choosing patience over action.
The London Picture: Slower Sales and More Choice
London's property market is showing clear signs of a slowdown that mirrors the national approvals data.
According to Rightmove, London homes are taking an average of 78 days to find a buyer. Only 42% of London listings manage to find one at all. That is a meaningful change from the faster-moving market of recent years, and it tells sellers that pricing has to be realistic from day one.
Zoopla's figures, published on 1 October 2026, add further detail. London prices are down 1% year on year. Across the UK, sales agreed are down 9% compared with the previous year. Unsold housing stock has reached its highest level in 12 years.
More stock on the market combined with fewer approved mortgages means buyers are in a stronger negotiating position than they have been for some time. Sellers who price ambitiously risk sitting unsold for months while more realistically priced homes nearby find buyers first.
What This Means for Kingston and South West London Buyers and Sellers
Kingston upon Thames sits within the same lending environment and broader London market trends described above, even though no Kingston-specific price data has been published alongside this release. A few practical implications follow from the national and London-wide figures.
For buyers:
- Higher rates mean it is worth getting a mortgage in principle early, so you know exactly what you can afford before you start viewing.
- With fewer approvals overall and more unsold stock, you may have more scope to negotiate on price, especially on homes that have been listed for longer than the London average of 78 days.
- Factor the effective rate of 4.6% and the 5.29% average two-year fix into your budgeting, not the rates you may remember from a few years ago.
For sellers:
- With only 42% of London listings currently finding a buyer, realistic pricing from the outset is more important than ever.
- Buyers are more cautious and better informed, so expect more questions about condition, structural issues and potential repair costs during negotiations.
- A slower market means patience and strong presentation matter more than setting an ambitious asking price and waiting for an offer.
For those remortgaging:
- Remortgage approvals fell to 34,000 in August from 34,600 in July, and with average outstanding mortgage rates around 4%, it pays to compare deals well before your current rate ends.
- Rising consumer credit borrowing, up to £2.5bn in August, suggests some households are using other credit to manage costs. Reviewing your overall finances alongside your mortgage renewal is worth the time.
Why a Survey Matters When You Have Negotiating Power
In a market where buyers have more choice and more time, a professional survey becomes a practical negotiating tool, not just a box-ticking exercise. With unsold stock at its highest level in 12 years and homes taking longer to sell, buyers can afford to be thorough before committing.
A detailed survey identifies issues that might otherwise surface during a mortgage valuation or, worse, after completion. In a slower market, sellers are often more willing to adjust price or address issues flagged in a survey report, simply because they know another buyer may not come along as quickly as in previous years. For buyers, a survey provides the hard evidence needed to renegotiate price or request repairs before exchange, protecting against costly surprises once the sale completes.
Frequently Asked Questions
Why are UK mortgage approvals the lowest since 2023?
Approvals fell to 54,900 in August 2026 because of a combination of rising mortgage rates, tighter affordability checks, and buyers choosing to delay decisions amid financial uncertainty.
How much have mortgage rates risen?
The effective rate on newly drawn mortgages rose to 4.6% in August 2026 from 4.45% in July. Rightmove reported the average two-year fixed rate at 5.29%, up from 5.09% the previous month.
Is the London property market slowing down?
Yes. London homes are taking an average of 78 days to find a buyer, only 42% of listings find one, and prices are down 1% year on year according to Zoopla.
Does this mean house prices will fall further?
The data shows London prices down 1% year on year and sales agreed down 9% across the UK, with unsold stock at a 12-year high. These trends suggest continued softness, though no Kingston-specific price figures have been released.
Should I get a survey in a slower market?
Yes. With buyers holding more negotiating power and homes taking longer to sell, a survey gives concrete evidence to support price negotiations or repair requests before you complete a purchase.
What does this mean for people remortgaging?
Remortgage approvals fell to 34,000 in August from 34,600 in July. With average outstanding mortgage rates around 4%, double the rate seen in December 2021, it is worth comparing deals well ahead of your current rate expiring.
Conclusion
The Bank of England's August 2026 data confirms that the UK mortgage approvals lowest since 2023 trend is not a temporary dip but a reflection of genuinely tighter conditions: higher rates, stricter affordability tests, and cautious buyers. London's own figures, slower sales, longer time on market, and record unsold stock, tell the same story at a local level.
For Kingston upon Thames buyers, this is a market that rewards preparation. Secure your mortgage in principle early, budget realistically around current rates, and use a professional survey to negotiate from a position of knowledge rather than guesswork. For sellers, pricing with the current market in mind, rather than past highs, will do more to secure a sale than waiting for conditions to shift back. Whichever side of the transaction you are on, getting clear, independent property advice before you commit is the most practical step you can take in this slower, more selective market.
