The Bank of England has reported that net mortgage borrowing rebounded to £6.6 billion in May from £3.0 billion in April, but remained below the record £11.4 billion in March.

Mortgage approvals for house purchase were 87,500 in May, up very slightly from 86,900 in April, but lower than the recent peak of 103,200 in November 2020.

For the first time since August 2020, consumers borrowed more as consumer credit than they paid off in May. Net borrowing was £0.3 billion. The effective rate on new personal loans remained low at 5.61%, compared to 7.03% in January 2020.

Households’ net flow in to deposit accounts fell again in May, to £7.0 billion. Deposit interest rates fell slightly to new historically low levels.

Large businesses made net repayments of £1.9 billion of loans in May, with small and medium sized businesses also making their first repayment, of £0.4 billion, in over a year. Private non-financial companies raised £0.6 billion of finance from capital markets in May, compared to a monthly average net issuance of £3.3 billion since March 2020.

John Phillips, national operations director of Just Mortgages and Spicerhaart, said: “Mortgage approvals are still remarkably high, all things considered, and the market doesn’t look set to grind to a halt any-time soon. The approvals in May are highly unlikely to complete in time for the stamp duty deadline, so it is safe to assume that these purchases are not motivated by the tax savings.

“Rates are returning to close to pre-pandemic levels, and clients are still rushing to find a new home. Houses are still the hottest property, with summer now here plenty are looking for a garden to enjoy the warmer weather.

“Interestingly May was the first month since August 2020 that consumers borrowed more than they paid off in credit. With the return of hospitality and shops re-opening, it appears consumers are now spending again.

“While this is certainly great for the economy, and those industries particularly devastated by the pandemic, this may result in a slight reduction in activity in the housing market in the coming months, as people buy cars and look to start booking holidays.

“Despite this reduction, there is still an imbalance of buyers and sellers. And with house prices continuing to rocket, the market is certainly still looking healthy for the coming months.”