The BoE said on Monday that 56,205 mortgages ​were approved last month, down from 66,034 in April

British lenders approved the fewest mortgages since December 2023 in May ​and consumer lending grew less than expected, according to Bank ‌of England data that revealed the impact of higher borrowing costs caused by the Iran-U.S.

The BoE said on Monday that 56,205 mortgages ​were approved last month, down from 66,034 in April.

Net ⁠unsecured lending to consumers rose by £1.662 billion ($2.19 billion) on the month, below ​economists’ forecast of a £1.8 billion rise and the smallest increase since December ​2025.

On a three-month moving average, consumer lending grew at the slowest pace since October 2025, up 8.7% on a year ago.

The property market remained fairly resilient through March and ​April, with mortgage lending running in line with long-run averages, but ​May’s data provided the first signs that a larger number of borrowers were beginning ‌to ⁠sit on their hands, said Simon Gammon, a managing partner at mortgage brokers Knight Frank Finance.

That’s unsurprising given the uncertain outlook for inflation, the rising cost of living and weaker consumer confidence, he added.

Gammon said an agreement between the United States and Iran ​earlier this month ​could help ease ⁠mortgage rates, if it holds. But he warned that uncertainty about who would replace Prime Minister Keir Starmer, who said he would resign last ​week, could risk the recovery.

Rising mortgage rates and weaker ​consumer confidence ⁠since the start of the Iran war have caused drops in house prices and buyer demand.

The BoE said net monthly mortgage lending, which lags ⁠behind mortgage approvals and ​reflects completed house purchases, dropped to a ​net £2.889 billion in May, the lowest in a year and down from an increase of £4.439 ​billion in April.