Bank of England’s Money and Credit figures for July 2025 showed net mortgage borrowing by individuals dropped by £0.9bn to £4.5bn, after a rise to £5.4bn in June.
Net mortgage approvals for house purchases went up by 800 to 65,400 in July, but remortgage approvals fell by 2,700 to 38,900.
Net borrowing of consumer credit by individuals rose slightly to £1.6bn from £1.5bn in June.
Within this, net borrowing on credit cards increased to £0.8bn, up from £0.7bn, and other forms of consumer credit also rose to £0.9bn from £0.7bn.
The annual growth rate of borrowing by large businesses increased from 6.7% to 8.0%.
Borrowing by small and medium-sized enterprises (SMEs) grew from 0.3% to 0.9%, the highest since August 2021.
Private non-financial corporations borrowed £0.3bn in July, after borrowing £1.1bn in June.
The net flow of sterling money (M4ex) was £7.1bn in July, down from £11.4bn in June.
Households increased their holdings of money by £7.3bn.
Private non-financial corporations increased holdings by £0.5bn, while non-intermediate other financial corporations reduced holdings by £0.6bn.
Sterling net lending to private sector companies and households (M4Lex) was £7.7bn in July, compared to £19.9bn in June.
This was led by increases of £5.2bn in net lending to households and £3.4bn to private non-financial corporations, partly offset by net repayments by non-intermediate other financial corporations of £1.0bn.
Reaction:
Nathan Emerson, CEO of Propertymark:
“Considering the many twists and turns within the wider economy currently, it’s extremely positive to see a further uplift in mortgage approvals.
“The resilience of the housing market is often a direct indicator of consumer confidence and affordability, and it has been reassuring to see forward momentum as the year has progressed.
“Hopefully, now that the Bank of England has taken the call to cut the base rate by a further quarter per cent, we should see lenders bringing additional levels of competition to the marketplace.
“Those already on fixed-term mortgage products should already be feeling the combined benefit of three base rate cuts across the year.”
Richard Pike, chief sales and marketing officer at Phoebus Software:
“Today’s Money and Credit figures show a mixed picture for the mortgage market. While net mortgage borrowing fell back in July after a strong June, approvals for house purchases edged higher, suggesting that underlying demand remains resilient despite affordability pressures.
“The drop in remortgage approvals highlights that many borrowers are still holding off making decisions in the hope of securing a better deal as rates settle.
“With the Bank of England’s recent base rate cut yet to fully feed through, the coming months will be crucial in determining whether activity levels continue to build momentum.”
