29 June 2026
If you are covering the Bank of England's Money and Credit statistics, please see the following comment from Ian Futcher, financial planner at Quilter:
“This latest set of Bank of England data points to a clear slowdown in housing activity through May, with both borrowing and approvals falling back sharply. Net mortgage borrowing dropped to £2.9 billion from £4.4 billion, well below the recent trend, while approvals for house purchases declined to 56,200 and remortgaging activity also eased materially. Taken together, this suggests that demand is being pushed out as households hold back on making long-term financial commitments.
“It is important to view these figures in context though. The May data captures a period when there was still significant uncertainty around whether a ceasefire in the Iran conflict would materialise. That backdrop has weighed heavily on confidence, particularly in a market as sensitive to interest rate expectations as housing. For many prospective buyers, heightened geopolitical risk translates into concerns about inflation, energy prices and ultimately borrowing costs, which is leading to decisions being delayed rather than cancelled outright.
“At the same time, savings behaviour remains relatively firm. Households deposited £5.4 billion into bank and building society accounts in May, with strong flows into ISAs and time deposits as savers continue to take advantage of improved rates. This suggests that while people may be holding off on large purchases such as property, they are still building cash reserves and maintaining a degree of financial resilience in the face of uncertainty.
“Looking ahead, much will depend on whether the current ceasefire proves durable. Recent flare ups have already cast doubt on how long it can hold, and that uncertainty will continue to feed through into mortgage pricing in the near term. However, if tensions do ease more sustainably, we would expect a gradual drift down in mortgage rates as markets reassess the inflation outlook. That in turn should help unlock some of the demand that is currently sitting on the sidelines.
“For now, affordability remains stretched and timing the market remains difficult. Borrowers should keep their options under review and be prepared to act when conditions improve, particularly as even modest moves in mortgage pricing can have a meaningful impact on overall borrowing costs.”
