Mortgage approvals for house purchases in the UK rose slightly in February, with 62,584 loans agreed, up 3.9 per cent from 60,246 in January, according to the latest figures.
However, the total remains down 3.9 per cent on February 2025, when 65,114 approvals were recorded.
Analysts say the annual decline is consistent with a wider slowdown in the housing market, driven by economic uncertainty, higher borrowing costs, and the ongoing global tensions in the Middle East.
Despite the year-on-year dip, there is cautious optimism among lenders and economists. A resolution to the Iran conflict, alongside potential cuts to the Bank of England’s interest rates later in the year, could provide a welcome boost to housing demand and mortgage activity.
“February’s modest rise shows that buyers remain active despite uncertainty,” said a market analyst. “If geopolitical risks ease and rates come down, we could see approvals return to growth before the end of the year.”
The housing market continues to navigate a delicate balance between high costs and pent-up demand, with prospective buyers and lenders closely monitoring both global events and domestic policy signals.
Richard Merrett, Managing Director of mortgage adviser, Alexander Hall, said: “The current picture remains encouraging, particularly when you compare current market conditions to a year ago.
“Rates are lower, affordability has improved, and the average buyer is now considerably better off when it comes to the cost of their mortgage repayments.”
Jonathan Samuels, CEO of specialist lender Octane Capital, added: “We’ve seen a strong start to the year where mortgage market activity is concerned, with approvals once again starting to climb and a stronger rate than anticipated.
“This improving buyer sentiment is being driven by a mortgage landscape that is far more favourable for homebuyers than it was a year ago and this remains the case despite developments in the Middle East in recent weeks.
“Whilst the Iran conflict has had an impact on mortgage sector confidence to an extent, it’s unlikely to make a lasting dent in domestic sentiment and, whilst we may see a momentary dip in approval activity in the next set of figures, the outlook for the year ahead remains wholly positive.
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