Target Group comments on BoE Money and Credit data

30 January 2026

Melanie Spencer, growth director at Target Group, said:

“A significant drop in mortgage approvals in December shouldn’t be too much of a surprise, particularly when you factor in the usual seasonal lull, along with a very late Budget. This created a pent-up demand which is already starting to work its way through as many parts of the market report a positive start to 2026. Transactions remained pretty stable in December, showing that while many had put their plans on ice in the run-up to the Budget, there was those still making moves – likely out of a need rather than a want.

“Likely buoyed by the base rate cut in December and predictions of both two more cuts and improving inflation, lenders have been very active in this early part of the year. While some affordability and deposit pressures remain, the lending landscape is in good health with high levels of product choice – particularly in high LTV brackets. Lenders will continue to fill their pipeline for the coming year and look to meet their own lending targets and ambitions for market share. It comes as reports suggest that affordability is on course to return to more manageable levels. It means that barring any economic of geopolitical shock – which is an increasing threat in the current climate – we should be in store for a really positive year.

“Given the current factors in play at home and abroad – along with increasing choice at the higher end of the mortgage market – there’s no doubt that lenders need to stay vigilant. Not only does it place greater importance on efficient, scalable and tech-enabled solutions and processes, but it places fresh emphasis on servicing and ensuring that lenders have the right capabilities in place – either in-house through digital transformation or outsourced to the right partners.”