UK mortgage approvals remained surprisingly strong in April despite warnings of economic pain ahead. The Bank of England reported 66,000 new home purchases and 51,000 refinancing deals, catching economists off guard given the £1.7tn mortgage market's sensitivity to bond market volatility from Iran tensions.

Early 2025 saw banks withdrawing products and lifting prices, suggesting borrower strain. Yet NatWest's Katie Murray told investors that mortgage activity exceeded expectations through Q2, while brokers report cautious but steady demand. Oxford Economics attributes the strength to seasonal adjustments, but Capital Economics predicts a housing downturn soon.

Several factors support current resilience. Households accumulated £236bn in extra cash savings, with real wages up 6%, while recent reforms expanded lending access. Two-year mortgage rates rose just 25% in three months to May, versus 70% surges during 2022's crisis period.

British consumers have adapted better than anticipated to persistent uncertainty. With household deposits now exceeding debt levels, domestic-focused UK companies face pressure as investors price in energy-cost driven spending cuts.