The Bank of England has published its Money & Credit data for October.

Net borrowing of mortgage debt by individuals increased by £0.9 billion to £3.4 billion in October, following a decrease in net borrowing of £0.3 billion in September.

The annual growth rate for net mortgage lending rose to 1.1% in October from 0.9% in September, continuing the upward trend observed since April 2024. Gross lending increased to £20.2 billion in October, from £19.5 billion in September, while gross repayments were little changed at £17.7 billion.

NET APPROVALS

Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing,  increased by 2,200 to 68,300 in October, the highest level since August 2022 (72,200).

Likewise, approvals for remortgaging (which only capture remortgaging with a different lender) rose for the third consecutive month to 31,400 in October, a month-on-month increase of 500.

“Despite lower borrowing rates, we are still living in a higher cost environment than most of us are used to”

CONSUMER CONFIDENCE

Tomer Aboody, director of specialist lender MT Finance, said: “There is increased positivity with net mortgage approvals at their highest since August 2022, showing consumer confidence from a purchasing perspective. This needs to be sustained for a period of time, which the further expected reduction in interest rates should help with.

“Despite lower borrowing rates, we are still living in a higher cost environment than most of us are used to. Sellers may try to charge a premium because the cost of everything is higher but are likely to find that buyers aren’t prepared to pay it.”

DUCKS IN A ROW

Melanie Spencer, sales and growth lead at Target Group, added: “Despite much concern of consumers holding their breath before October’s Budget announcement, today’s figures show that many were actually trying to get their ducks in a row in advance.

“It’s important to remember that mortgage approvals can take weeks to work their way through the system, but still, a record month shows the appetite among potential borrowers and positive momentum we saw prior to the Budget.

“Now post-Budget, it will be interesting to see what next month’s figures report for November, particularly with the unsettling of swap rates and a subsequent rise in mortgage rates. We are starting to see some positive signs of movement among lenders, which will certainly be welcome among brokers and borrowers. Of course, all eyes will be on the path of interest rate, which has certainly cooled with the rise in inflation.

“Even so, the market will continue to prioritise innovation, whether it’s in product or criteria. With lenders looking to fill their pipeline for next year and meet their own lending targets, there’s no question we will see new developments to help keep the market moving. Leveraging the right technology and key integrations will be critical in making this a reality.”