Mortgage borrowing rebounds in May as buyer confidence grows

Today’s Bank of England data shows a rebound in mortgage borrowing which increased by £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April. Mortgage approvals for house purchases – an indicator of future borrowing – increased by 2,400 to 63,000 in May, its first increase since December 2024.

Approvals for remortgaging (which only capture remortgaging with a different lender) also increased in May, by 6,200 to 41,500. This is the largest increase since February 2024.

Net borrowing of consumer credit by individuals was £0.9 billion in May, more than halving from £1.9 billion in the previous month. Net borrowing through credit cards decreased to £0.1 billion in May, from £1.2 billion in April. Net borrowing through other forms of consumer credit decreased slightly to £0.7 billion, from £0.8 billion over the same period.

Richard Pinch, Senior Director of Risk at leading independent consultancy Broadstone, said:

On mortgage borrowing…

“Following the collapse of mortgage borrowing due to the conclusion of the Stamp Duty holiday at the end March, mortgage borrowing bounced back to growth in May. There was particularly strong growth in mortgage approvals and remortgaging demonstrating a growing confidence from buyers in the housing market on the expectation of lower rates following the Bank of England’s rate cut in May.”

On consumer credit borrowing…

“Credit card lending sank dramatically ahead of the Summer period with households tightening their belts as finances remain squeezed. Following the splurge of credit card spending in April, the rapid swing back in the following month highlights the ongoing cost of living pressures borrowers are contending with, especially in the context of several chunky household bill increases from April onwards.”