The UK saw a significant uptick in net mortgage borrowing by individuals in May 2025, with figures rising by £2.8bn to reach £2.1bn, according to the latest Money and Credit statistics from the Bank of England (BoE).
This follows a sharp contraction in April, when net borrowing had fallen by £13.8bn to a negative £0.8bn, largely influenced by a maturing government-backed mortgage support scheme.
Alongside the rebound in borrowing, the number of mortgage approvals for house purchases rose modestly by 2,400, bringing the total to 63,000 in May.
Remortgaging activity also experienced a notable boost, with approvals climbing by 6,200 to 41,500.
This marked the largest monthly increase in remortgaging approvals since February 2024, when they rose by 6,600.
In contrast, consumer credit growth slowed sharply. Net borrowing of consumer credit by individuals declined to £0.9bn in May, nearly halving from £1.9bn in April.
Within this category, net borrowing via credit cards dropped significantly to just £0.1bn, down from £1.2 bn in the previous month.
Other forms of consumer credit saw a slight decrease, with net borrowing falling to £0.7bn from £0.8bn.
Reaction:
Melanie Spencer, sales and growth lead at Target Group, part of Tech Mahindra:
“After a few quiet months it’s good to see approvals rising. That will help lighten the shadow these statistics have been casting over the market’s outlook.
“It’s too soon for optimism though. Yes, some lenders have started loosening criteria a little. But recently, we have seen inflation, including owner-occupied housing costs, the so-called CPIH, hitting 4%.
“And the RPI, the Retail Prices Index, which sets the costs of many business contracts and the charges on the index-linked portion of our national debt, has risen to 4.3%.
“On any rational assessment, inflation is running at double the target rate. That may well lead to some debate at the Bank about increasing interest rates or, at the very least, making fewer cuts, later. That will mean limited relief for borrowers in the future.”
Jason Tebb, president of OnTheMarket:
“The market appears to be back on track with approvals for house purchases, an indicator of future borrowing, increasing for the first time since December.
“Market stability and buyer confidence continues to be steady, even though it is now too late to take advantage of the stamp duty holiday.
“With the rate on newly-drawn mortgages falling again in May, while the rate on outstanding mortgage stock rose slightly, overall there are signs that affordability continues to ease a little.
“Several base rate reductions since last August have helped, along with lenders easing criteria, but mortgage rates are still higher than many have grown used to in recent years. Further rate reductions from the Bank of England would provide more impetus for the market in the second half of the year.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“With mortgage approvals rising for the first time this year, it’s a positive sign for the market.
“The effective interest rate paid on new mortgages fell slightly to 4.47% in May and since then, we have seen some lenders trim their mortgage rates further.
“However, with the rate on the outstanding stock of mortgages rising slightly to 3.87%, affordability remains a concern.
“Remortgaging numbers jumped by 6,200 in the month, suggesting that borrowers are keen to shop around for better deals even if it means the hassle of applying to another lender.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“This is the first increase in mortgage approvals following four consecutive monthly falls, demonstrating the direction of travel for housing market activity over the next few months at least, as well as underlying resilience.
“New buyers are still cautious about economic prospects here and abroad and are taking their time to appraise the much better choice of available properties, resulting in lengthening transaction times.
“But these numbers do not of course include the estimated 40% of cash buyers who we have found are proving even more picky when it comes to agreeing terms.”
Nathan Emerson, CEO of Propertymark:
“It is incredibly positive news to see an increased number of mortgage applications approved. It is one of the loudest signals of them all regarding consumer affordability, and it is also a massive vote of confidence from lenders in the longer-term prospects of the economy too.
“As we head into the summer months, we have witnessed on average the number of viewings per property available see an uplift of around 30% compared to the month previous.
“On top of this, we have also seen the UK Government make a pledge to create a National Housing Bank which could bring significant investment to help build 500,000 new homes, enabling a potential greater degree of flexibility for those who aspire to buy.”
