Rising borrowing costs tied to the Iran conflict are weighing on homebuyer demand in the U.K., where mortgage approvals have fallen to a 32-month low, while in the Netherlands a surge in listings is easing a tight market and slowing price growth.
The Bank of England reported 54,918 mortgage approvals for home purchases in August, the lowest monthly total since December 2023. Simon Gammon, managing partner at Knight Frank Finance, said lending to homebuyers was down 15% from August 2025 as energy-driven inflation pushed up borrowing costs. Moneyfacts reported that the average five-year fixed rate reached 5.94% this week, its highest since October 2023, while two-year fixed rates hit 5.93%.
The slowdown carried into September. Property portal Zoopla found agreed sales fell 9% year over year, even as the number of homes for sale rose 5%, with the gap widest in London and southern England. Paul Dales, chief U.K. economist at Capital Economics, said that mortgage rates, likely to stay above 4.5% for most of 2027, would outweigh the benefit of the government’s new ‘Your First Home’ program for first-time buyers.
In the Netherlands, an ING report found that homes listed by NVM real estate agents have more than doubled in five years, from 18,000 to 37,000. Much of the new supply comes from investors selling rental properties under tougher tax rules — an estimated 40,000 last year, or roughly one in six existing-home sales nationally and one in three in the four largest cities. Older owners are also selling in rural areas. The average 10-year fixed NHG mortgage rate has risen to 4.4% from 3.6% a year ago, adding about 6% to monthly payments. ING still expects prices to rise 2.5% this year and 1% in 2027, saying the market remains too tight for declines.
IAM Member Impact: Falling U.K. approvals and agreed sales point to softer domestic move volumes in the months ahead, particularly in London and the South, and the outlook may stay subdued into 2027 if rates hold. In the Netherlands, sales activity remains high, but more of it is coming from investor sell-offs and older homeowners downsizing. Members serving the Dutch domestic market should watch for continued demand tied to rental turnover and senior relocations.
Source: The Guardian; NL Times