Net borrowing of mortgage debt by individuals increased by £0.9bn to £4.2bn in January, following an increase in net borrowing of £1.1bn in December, data from The Bank of England’s latest Money and Credit report has revealed.
The annual growth rate for net mortgage lending rose to 1.8% in January from 1.5% in December, continuing the upward trend observed since April 2024.
Gross lending was little changed in January at £21.3bn, while gross repayments decreased to £16.3bn, from £18.5bn in December.
Net mortgage approvals for house purchases, which is an indicator of future borrowing, decreased by 300 to 66,200 in January, following an increase of 400 in December.
Approvals for remortgaging increased by 2,200 to 32,900 in January, after falling over the previous two months.
Reaction:
Nathan Emerson, CEO of Propertymark:
“With widespread economic forces impacting the housing market in several ways, we continue to see the likes of inflation and a generally elevated base rates still proving unsettling for some consumers.
“Overall, the housing market is showing an immense degree of resilience, with recent data from our member agents illustrating an almost 40% increase in sales agreed when compared to the same period only twelve months earlier.
“When conditions permit, it would remain welcome news to see the Bank of England have the confidence to further reduce base rates and for lenders to introduce additional products built on more competitive rates.”
Stephanie Daley, director of partnerships at Alexander Hall:
“Mortgage approval levels have been increasing at a consistently strong rate over much of the last year and we’ve seen buyers push on with their plans to purchase despite mortgage rates remaining stubbornly higher than we’ve become accustomed to.
“Although the latest figures show a marginal decline in January, this is almost certainly a result of the seasonal lull that comes following the Christmas break and the expectation is that mortgage market activity will only strengthen as the year progresses.
“Whilst the impending stamp duty deadline is driving activity to a degree, it’s certainly not the predominant factor fuelling the market at present and, with the Bank of England already reducing interest rates last month, along with a number of lenders launching sub 4% rates for the first time this year, we expect to see further momentum build once the deadline has passed.”
Jonathan Samuels, CEO of specialist lender Octane Capital:
“A momentary monthly dip in mortgage approval numbers is to be expected either side of the Christmas break and so the marginal decline seen in January certainly doesn’t suggest the market is running out of steam.
“In fact, UK homebuyers appear to have begun the year on the front foot and the real indicator of market health is the fact that total mortgage approval numbers have remained above the 60,000 monthly benchmark for a full year now, not to mention they are also up 18.3% year on year.
“Whilst mortgage rates remain a sizable obstacle for many buyers, the general consensus is that affordability should continue to improve as the year progresses, further fuelling the consistent momentum that has been building over the last 12 months.”
