MORTGAGE approvals were down in May due to conflict in the Middle East – but brokers and property experts expect the market to “bounce back” this summer.
Net mortgage approvals for house purchases decreased to 56,200 in May, below an average of 63,300 over the previous six months, Bank of England data shows.
Approvals for remortgaging also decreased, to 33,300 in May, from 51,200 in April.
Brokers and property experts said the slowdown in mortgage approvals across house purchases and remortgaging during May is a natural cooldown considering recent unrest in the mortgage market.
Conflict in the Middle East led to mortgage rates shooting up in March and April, but the war appears to have cooled in recent weeks.
Experts expect the dial to be heading in the right direction in June and the coming months – mortgage rates have started to come down from their April peaks.
Activity for remortgage business is expected to be busy this year, with many coming off cheap fixed rate deals.
It’s been a turbulent first half of the year
Shaun Sturgess, Director at Sturgess Mortgage Solutions, said it’s been a tough first half of 2026.
He added: “With events in the Middle East sending mortgage rates north, it’s been a turbulent first half of the year for the property market and sentiment has inevitably suffered. People have been worried about inflation and many have decided to sit tight.
“But lenders are now cutting rates and things are looking better for the second half of the year as confidence returns. It could be a busier-than-usual late-summer period if rates continue to nudge down.”
Omer Mehmet, Managing Director at Welling-based Trinity Finance, said demand for mortgages is still there.
He added: “Though this data shows a slowdown in mortgage approvals, the lack of activity in the first half of the year due to the war could see a slingshot effect during the rest of 2026 as demand returns.
“There is a lot of pent-up demand out there, as many people put their plans on hold amid the economic uncertainty, and as this feeds through it could reignite approval levels in the months ahead. Mortgage approvals may be down but demand for mortgages is not out.”
These May figures are a rear-view mirror
Richard Davidson, Mortgage Advisor at onlinemortgageadvisor.co.uk, said the market has bounced back this month.
He added: “These May figures are a rear-view mirror. They capture the nerves of the spring, when the conflict in the Middle East sent funding costs spiking and political uncertainty at home left buyers sitting on their hands rather than committing, which is exactly why both purchase and remortgage approvals dropped back.
“The mood I’m picking up from clients now is a world away from that. Tensions in the Middle East have calmed, lenders like NatWest and Santander are trimming fixed rates again, and a fresh approach in government has given people a reason to feel more positive, so I’d expect approvals to bounce back through the summer as that confidence filters down to the front line.”
Samuel Mather-Holgate, Managing Director & IFA at Mather and Murray Financial, said people are delaying their property purchases due to the uncertainty.
He added: “May’s mortgage slowdown is a clear sign that buyers are sitting on their hands. The talk of increasing rates is putting people off, but the precarious political backdrop adds another layer of caution. When households are unsure what taxes, rates and policy will look like after the dust settles, moving home becomes easier to delay.
“The sharp fall in remortgage approvals also suggests borrowers are not rushing unless they have to, with many facing a painful hike from older, cheaper deals. This is not a housing crash signal, but it does show a market short on confidence and highly sensitive to uncertainty.
“Over the next few months, activity is likely to remain patchy – demand is there, but buyers need clearer politics, firmer rate-cut expectations, a better housing policy and more realistic pricing before momentum returns.”
