Net mortgage lending fell to £4.4 billion in April, down 35% from £6.8 billion in March, the latest figures from the Bank of England show.
Lending this month was also below the previous six-month average of £5.1 billion.
But approvals for home purchases rose to 65,900 in April, above an average of around 63,100 in the previous six months, the Bank of England reported.
Approvals for remortgages, which exclude product transfers, remained largely unchanged compared to March.
The interest that borrowers pay on newly taken out mortgages rose from 4.03% in March to 4.08% in April.
The interest rate on the outstanding stock of mortgages was 3.92% in April, compared to 3.93% in March.
Nathan Emerson, CEO of Propertymark, said: “It is disappointing to see that April 2026, the period covered by today’s report, saw a decline in lending.
“A surprise drop in inflation in May could provide temporary respite for many consumers when it comes to their personal finances.
“It could also lead to a temporary increase in lending by the time the May credit figures are released.
“However, with Ofgem announcing that household energy prices will rise by 13% in response to geopolitical tensions, many individuals and families may face additional financial pressures in the very near future, on top of the challenges they have faced since the start of the year.
“This could prompt some people to take a more cautious approach to their spending habits, and could impact both the mortgage market and the wider economy in the coming months.”
MT Finance director Tomer Aboody says the increase in mortgage approvals is good news as interest rates have risen.
He says: “It indicates that people still want or need to move and may be tired of waiting for optimal conditions.
“With no positivity coming from the government and the economic outlook looking difficult, buyers need to be resilient.
“The macro environment is impacting mortgage rates and inflation, but that cannot hide the poor leadership currently evident in the country, where there is no impetus for growth.”
OnTheMarket president Jason Tebb also believes the increase in approvals bodes well.
“Obviously, these figures reflect decisions made in the earlier stages of the conflict in the Middle East, when buyers may have been keen to take advantage of the competitive mortgage rates they had managed to secure.
“It also demonstrates the continued resilience of the housing market and the recent cut in key interest rates by the Bank of England should help further strengthen this sense of stability.
“Our proprietary real estate sentiment index suggests that buyers and sellers continue to adapt to market conditions.
“Even against the backdrop of ongoing political and economic turbulence, attitudes toward affordability, property values and moving remain remarkably consistent.”