Net mortgage lending rose in November, supported by a further increase in remortgaging approvals, while consumer credit growth also continued to accelerate.

Latest Money and Credit figures from the Bank of England show that net borrowing of mortgage debt by individuals increased to £4.5 billion in November, up from £4.2 billion in October, when borrowing had fallen by £1.0 billion.

The rise in net lending came despite a modest fall in gross mortgage lending, which declined by £0.6 billion to £23.7 billion over the month. Gross repayments, however, fell more sharply, down £3.1 billion to £19.4 billion, resulting in the overall increase in net borrowing.

On an annual basis, the growth rate for net mortgage lending ticked up to 3.3% in November from 3.2% in October. This marks the highest annual growth rate since January 2023, when it stood at 3.4%.

MORTGAGE APPROVALS

Net mortgage approvals for house purchase slipped slightly in November, falling by 500 to 64,500. While the decline was modest, approvals remain a closely watched indicator of future borrowing and transaction volumes.

In contrast, remortgaging activity continued to strengthen. Net approvals for remortgaging rose by 3,200 during the month to 36,600, reflecting ongoing borrower engagement as existing fixed-rate deals come to an end.

MORTGAGE RATES

The effective interest rate on newly drawn mortgages increased in November for the first time since February 2025. The rate rose to 4.20% from 4.17% in October, although it remains below the 4.53% level recorded earlier in the year.

The effective rate on the outstanding stock of mortgages also edged higher, increasing to 3.90% in November from 3.89% in the previous month.

Nathan Emerson, CEO of Propertymark, said: “Throughout 2025, it has been encouraging to see lenders offering increasingly competitive mortgage products, particularly any aimed at first-time buyers, helping to support activity despite wider economic uncertainty.

“The base rate cut introduced before Christmas is likely to further boost confidence as we head into 2026, making borrowing more affordable and encouraging more buyers to take the next step. Should base rates ease further over the course of the year, this would provide additional momentum for mortgage lending.

“With already greater levels of consumer flexibility than only 12 months ago, we hope this trend continues, with future reports hopefully reflecting growing confidence for those looking to purchase their first home or move further up the housing ladder.”

CONSUMER CREDIT

Alongside developments in the mortgage market, consumer credit growth accelerated further in November. Net borrowing of consumer credit by individuals rose to £2.1 billion, up from £1.7 billion in October.

Credit card borrowing accounted for £1.0 billion of the total, compared with £0.7 billion the month before. Net borrowing through other forms of consumer credit, including personal loans and car dealership finance, increased slightly to £1.1 billion from £1.0 billion.

The annual growth rate for all consumer credit rose to 8.1% in November from 7.5% in October. Within this, the annual growth rate for credit card borrowing increased to 12.1%, the highest level since January 2024, while other forms of consumer credit grew at an annual rate of 6.3%, the strongest since September 2024.

Interest rates on consumer borrowing showed a mixed picture. The effective rate on interest-charging overdrafts fell by 21 basis points to 21.57%. By contrast, the effective rate on new personal loans increased for the fourth consecutive month, rising to 8.68% from 8.39%, while the effective rate on interest-charging credit cards edged up to 21.60%.

HOUSEHOLD DEPOSITS

Household savings continued to increase in November, with households depositing an additional £8.1 billion with banks and building societies, compared with £6.7 billion in October.

This was driven primarily by inflows into interest-bearing sight deposit accounts, which rose by £7.0 billion. Households also deposited £5.1 billion into ISAs and £2.1 billion into non-interest bearing accounts. These increases were partially offset by withdrawals of £1.2 billion from interest-bearing time deposit accounts.