Why did UK mortgage approvals fall in July 2026?

Mortgage approvals for house purchase fell to 56,053 in July 2026, down 15% on a year earlier and down 4% on June's revised 58,215, the lowest total since January 2024 (Bank of England Money and Credit, July 2026, published 1 September 2026). The Bank's own data points to higher borrowing costs as the main driver: mortgage borrowing by individuals dropped sharply to £4.3bn from £7.7bn in June, well below the recent six-month average, as swap-rate-driven repricing pushed the whole-market average two-year fixed rate up to 5.73% (Moneyfacts, 15 September 2026). The one part of the data still rising is remortgage approvals, up to 34,500 from 34,100, as more homeowners act ahead of a fix ending rather than risk a further rate rise. If you're a first-time buyer or mover, treat this as a sign that lenders and other buyers are being more cautious right now, not that the market has stalled completely, and get a mortgage in principle refreshed before you start viewing rather than relying on an old one.

Are UK house prices going to fall in 2026?

Probably not by much, on the portals' own numbers. Rightmove has cut its 2026 national forecast from +2% to somewhere between 0% and -2%, after asking prices fell 2% in August, the steepest August drop since 2018 (Rightmove House Price Index, August 2026). Zoopla has made a smaller cut, trimming its 2026 forecast to a 1% rise (Zoopla House Price Index, August 2026). Meanwhile Nationwide recorded actual annual growth of 1.6% in August, with the average UK home now valued at £275,465 (Nationwide House Price Index, August 2026), and RICS surveyors still report prices drifting slightly lower month to month even as buyer enquiries improve (RICS UK Residential Market Survey, August 2026). Put together, that's a flat-to-slightly-down national picture with real regional variation, not the sharp correction some buyers are holding out for. If you're waiting for prices to fall meaningfully before you buy, the data suggests you could be waiting for a move that simply isn't coming.

Will stamp duty change in the October 2026 Budget?

The Prime Minister has reportedly ruled out scrapping or restructuring stamp duty in the Autumn Budget, due on 28 October 2026, so the current bands look set to hold for now. What is under active consideration, according to September 2026 reports, is lowering the threshold for the separate high-value council tax surcharge, often called the mansion tax, from £2 million to £1.5 million. That charge, due to start in April 2028, currently adds £2,500 to £7,500 a year on top of existing council tax for homes above £2 million, and fewer than 1% of English properties currently sit above that line. Meanwhile, residential sales in England and Wales fell 18.4% in the year to March 2026, with the current stamp duty thresholds cited as one contributing factor (HMRC Stamp Duty Land Tax statistics, via Mortgage Solutions, 18 September 2026). If your home might sit near either threshold, get a realistic valuation now rather than wait for Budget day to find out where the lines have moved.

Why are rents still rising if house prices are flat?

Because the two markets are responding to different pressures. UK private rents rose 3.8% in the year to August 2026, up from 3.7% in July and the highest annual rate since December 2025, with England rents up 4.0% to an average £1,459 a month (ONS Price Index of Private Rents, August 2026, published 16 September 2026). House prices, by contrast, are being held back by higher mortgage rates that constrain what buyers can borrow, while rental demand keeps climbing as some would-be buyers stay renting for longer and landlord numbers in the sector fall. The North East and North West saw the steepest regional rent rises, both at 5.8% annually. If you're renting while you save a deposit, don't treat that wait as free: rent increases at England's current 4.0% annual pace add roughly £58 a month to the average England rent over a year, which quietly erodes however much extra deposit that year of waiting was meant to buy you.

56,053 mortgages, a 2% forecast cut: this week in UK housing

If you've read three different property headlines this week and come away with three different feelings about where things are heading, that's not you misreading the market. It's the market pulling in three directions at once. Mortgage approvals just fell to their lowest level in two and a half years, two of the biggest property portals quietly cut their 2026 price forecasts, and rents kept climbing regardless. None of those three facts tells you what to do on its own. Put together, they do.

Here's what actually happened in UK housing this week, and what each story means if you're the one making the decision.

Mortgage approvals fall to their lowest since January 2024

Just 56,053 mortgages were approved for house purchase in July 2026, down 15% on the same month a year earlier and down 4% on June's revised 58,215 (Bank of England Money and Credit, July 2026, published 1 September 2026). Mortgage borrowing by individuals fell more sharply still, to £4.3bn from £7.7bn in June, well below the recent six-month average of £5.3bn. The one line moving the other way is remortgaging: approvals there rose to 34,500 from 34,100, as more homeowners act early rather than risk a further rate rise finding them at renewal.

So if you're coming up to the end of a fixed rate, you're already in the part of this data that's growing rather than shrinking, and working through a proper remortgage preparation checklist now gives you a better shot at today's rates than waiting for your lender's renewal letter to land.

Rightmove and Zoopla both cut their 2026 forecasts

Rightmove has downgraded its national house price forecast for 2026 from +2% to somewhere between 0% and -2%, after average asking prices fell 2% in August, the steepest August drop since 2018 (Rightmove House Price Index, August 2026). Zoopla has made a smaller but similar move, trimming its own 2026 forecast to a 1% rise (Zoopla House Price Index, August 2026). Surveyors are telling a slightly less gloomy story underneath those headline numbers: RICS's August survey put new buyer enquiries at -19% and agreed sales at -17%, both the least negative readings in months, even as prices continued drifting lower overall (RICS UK Residential Market Survey, August 2026, published 10 September 2026). The same survey found more surveyors expecting rents to keep rising over the next year, forecasting growth of around 3%, a reminder that a soft sales market and a tight rental market can sit side by side, especially for landlords already absorbing the Section 24 tax hit on their mortgage interest.

So if you've been holding out for a sharp 2026 price correction before you buy, the portals themselves aren't forecasting one, at most a flat year with pockets of regional weakness, which means the numbers you run on a property today are unlikely to look much different by December.

Stamp duty and a near-20% drop in sales

Residential property sales across England and Wales fell 18.4% in the year to March 2026 compared with the year before (HMRC Stamp Duty Land Tax statistics, via Mortgage Solutions, 18 September 2026), with commentators pointing to the current SDLT thresholds as one of the barriers keeping transactions down. It's a striking figure, but not really a surprising one once you know where those thresholds actually bite, something we've set out in full in our stamp duty explained guide. The sharpest edge, a roughly £5,000 jump in tax for spending £1 over the £500,000 first-time buyer relief cliff, is exactly the kind of thing that stalls a sale rather than just taxing it.

So if a purchase you're weighing up sits close to one of those band boundaries, working out your exact stamp duty bill before you make an offer isn't optional admin, it's the difference between a deal that completes and one that quietly falls through the cracks in this data.

A mansion tax threshold that could catch more homes

The high-value council tax surcharge, commonly called the mansion tax, is due to apply from April 2028 to homes worth £2 million or more, adding £2,500 to £7,500 a year on top of existing council tax bills, as announced in the November 2025 Budget. Reports this month suggest the government is actively considering lowering that threshold to £1.5 million ahead of the Autumn Budget on 28 October 2026, which would pull a meaningfully larger number of homes into scope, even though fewer than 1% of English properties currently sit above even the existing £2 million mark. Separately, the Prime Minister has reportedly ruled out scrapping or restructuring stamp duty itself in the same Budget.

So if your home might be edging toward either threshold, get a realistic valuation now rather than wait for Budget day to tell you where the line has moved, because a surcharge starting in 2028 is still a cost worth planning around three years out.

Rents keep climbing even as house prices flatten

UK private rents rose 3.8% in the year to August 2026, up from 3.7% in July and the highest annual rate since December 2025 (ONS Price Index of Private Rents, August 2026, published 16 September 2026). England rents rose faster still, up 4.0% to an average £1,459 a month, with the North East and North West posting the steepest regional increases at 5.8%. That's the uncomfortable context sitting underneath this week's softer sales figures: a slower sales market doesn't make renting any cheaper, and if the numbers above have you leaning toward waiting rather than buying, it's worth checking your own maths against some of the common deposit myths that keep first-time buyers renting for longer than they actually need to.

So if you're weighing renting for another year against buying now, remember rent isn't standing still while you decide, a year of increases at England's current 4.0% pace adds roughly £58 a month to the average England rent by next August.

The week in numbers:

56,053 — mortgages approved for house purchase, July 2026, lowest since January 2024 (Bank of England).
0% to -2% — Rightmove's revised 2026 UK price forecast, down from +2% (Rightmove).
£275,465 — average UK house price, August 2026, +1.6% annually (Nationwide).
18.4% — fall in England and Wales residential sales, year to March 2026 (HMRC).
3.8% — annual UK private rent inflation, August 2026, up from 3.7% in July (ONS).

What this means for you

These five stories don't point in one clean direction, and that's the actual finding this week: this isn't a single-story market right now. If your fix is ending soon, the approvals data says use that window, remortgaging is the one line still moving up. If you're a buyer hoping 2026 delivers a proper price correction, the portals themselves aren't forecasting one, so the numbers you run on a property today are unlikely to look meaningfully better by Christmas. And if you're renting while you save, treating "wait and see" as a free option isn't supported by this week's data either, rents rose faster in August than they did in July, and every month spent waiting is a month the deposit target quietly moves further away. Most people who run all five of these numbers together end up reaching the same conclusion: the market has stopped moving in one clear direction, so the right response is to run your own specific numbers now rather than wait for a headline to make the decision for you.