UK Mortgage Advances Rise 12.8% Amid Ongoing Market Pressures

Mortgage and rental markets in 2025 are experiencing a complex mix of trends influenced by rising costs and shifting borrower behavior. Consumer spending on rent and mortgages grew by 4.6% year-on-year in May, marking a slowdown as many homeowners prepare for higher repayments after fixed-rate deals expire, with most expecting monthly increases averaging £331. The Bank of England data showed a 12.8% increase in gross mortgage advances in Q1, the highest since late 2022, driven notably by a surge in lending to first-time buyers, though new mortgage commitments slightly declined. In the U.S., 30-year fixed mortgage rates edged up slightly to 6.93%, with mortgage credit availability at its highest since August 2022, yet the spring homebuying season underperformed as rising rates squeezed affordability and dampened buyer optimism. Refinancing activity also declined sharply in May, with fewer first-time buyers participating in the market, while non-qualified mortgage loans saw a gradual increase as alternative lending paths gain traction. Overall, the data reflect cautious optimism, with borrowers and lenders navigating ongoing financial pressures and seeking stability amid a tightening affordability environment.