The Bank of England has revealed that net borrowing of mortgage debt by individuals increased from £3.6 billion to £4.4 billion in November 2022.

Mortgage approvals for house purchases decreased to 46,100 in November from 57,900 in October, the lowest level since June 2020 (40,500).

The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 26 basis points, to 3.35% in November.

Consumers borrowed an additional £1.5 billion in consumer credit, on net, above the £0.7 billion borrowed in October – driven by an additional £1.2 billion of credit card borrowing.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Net borrowing increased in November compared with October, while mortgage approvals for house purchases dipped to the lowest level since June 2020.

“As expected, the average rate paid on new mortgages rose significantly, increasing by 26 basis points to 3.35 per cent in November. As borrowers will be all too aware, this came on the back of a significant increase in the average rate paid in both September and October.

“Thankfully, the situation has eased for borrowers since the worst of the fallout from the mini-Budget. Lenders have been returning with more attractive fixed-rate mortgages as Swap rates have settled, albeit at a higher level than in the recent past. We expect this to continue into the new year as lenders compete for business and try to attract new customers.

“With more interest rate rises likely in the short term, borrowers concerned about their mortgage should seek advice from a broker to find out what options are available.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Mortgage approvals are always a good indicator of future direction of travel for the housing market. On the ground over the past few months, we have been seeing buyers trying to take advantage of mortgages arranged at lower rates, while others try to come to terms with higher repayments, as evidenced in this survey.

“However, we have noticed many holding back until the early new year to check if mortgage rates really are stabilising before deciding to move. The equity-driven are certainly faring better than more-heavily mortgaged first-time buyers, who are also being squeezed by higher rents.”