The Bank of England’s (BoE’s) Money and Credit report, published today, revealed a sharp increase in mortgage borrowing, consumer credit, and overall net lending in June, highlighting a notable uptick in household and corporate financial activity.
Net borrowing of mortgage debt by individuals rose significantly to £5.3bn in June, a marked increase from £2.2bn in May.
This £3.1bn rise in mortgage borrowing reflects strengthening activity in the housing market.
Alongside this, the number of net mortgage approvals for house purchases increased slightly by 900, reaching 64,200.
Remortgaging activity also saw a modest rise, with approvals increasing by 200 to 41,800 – the highest level since October 2022, when approvals stood at 50,000.
Consumer credit also saw a notable expansion.
Net borrowing by individuals rose to £1.4bn in June, up from £0.9bn in May.
Credit card borrowing was the primary driver of this growth, climbing to £0.7bn from £0.2bn the previous month.
Meanwhile, borrowing through other forms of consumer credit remained stable at £0.7bn.
In the business sector, the annual growth rate of borrowing by large businesses slowed to 6.7% in June.
However, small and medium-sized enterprises (SMEs) recorded a return to positive borrowing growth for the first time since August 2021.
The annual growth rate for SMEs rose from -0.2% to 0.3%, suggesting a cautious revival in credit appetite among smaller firms.
Overall, private non-financial corporations (PNFCs) borrowed £1.0bn on net in June, following £1.2bn in May.
Nathan Emerson, CEO of Propertymark, said: “This is a positive sign at a time when there is a poor economic outlook in general and potential tax rises on the way.
“The Chancellor’s recent Leeds Reforms sent a positive signal to the mortgage market, which should encourage many lenders to focus new products and services towards those on lower incomes to help them take their first step onto the housing ladder.”
