Demand for mortgages in the UK fell sharply before the Bank of England’s November budget, according to a recent survey. Borrowers pulled back amid rising rates and tighter lending standards. The drop signals a cooling in the housing market, even as property prices show modest gains in 2024 year overall.

Analysts point to the Bank of England’s upcoming policy shift as a key driver. Higher borrowing costs have squeezed affordability, while stricter credit checks limit new entrants. Yet, recent data shows a slight uptick in home sales, suggesting that the market may still rebound once rates stabilize in the future.

Looking ahead, the Bank of England will likely keep rates elevated to curb inflation, which could further dampen mortgage demand. Investors watch the upcoming budget for signals on fiscal policy, while homebuyers brace for a slower pace. Analysts advise caution, recommending waiting for clearer rate trajectories in the near future.