Mortgage approval activity in the UK is reaching a four-year high, with the market on track to surpass 780,000 approvals in 2025, according to mortgage broker Alexander Hall. The firm, part of Foxtons, reviewed the Bank of England's approval data and attributes the rising momentum to growing borrower confidence, fueled by a series of base rate reductions.

Since August, the Bank’s Monetary Policy Committee has implemented four quarter-point rate cuts, bringing the interest rate down to 4.25%. So far in 2025, average monthly mortgage approvals stand at 65,119. This figure is 4% higher than the monthly average recorded in 2024, following a significant 31% year-on-year increase between 2023 and 2024.

Alexander Hall highlights that this level of activity, although still below historic peaks, represents the most active approval market since 2021. Based on current trends, the firm forecasts total mortgage approvals will reach 781,429 by the end of the year.

Stephanie Daley, director of partnerships at Alexander Hall, comments:
“The mortgage sector has been benefiting from improving consumer sentiment since the Bank of England first put a hold on interest rates back in September 2023 and this momentum has only grown stronger following the four cuts that have materialised since.”

“As a result, we’ve seen consistently positive growth in mortgage approval numbers over the course of the last year and it’s apparent that this trend has continued into 2025.”

Daley also acknowledges lingering challenges for homebuyers:
“Of course, we’re yet to see the market return to full strength when comparing current activity to previous historical highs, but it’s also important to note that while there have been improvements to market affordability by way of stronger earnings growth, the nation’s homebuyers are facing a considerably tougher task in today’s market.”

“Despite these challenges, we’re on course to see total mortgage approvals exceed the 780,000 threshold this year, which demonstrates that buyer appetites are very much alive and well in today’s market.” 

Source: Roger Baird, Mortgage Strategy