Household borrowing picked up in November as mortgage lending strengthened and consumers relied more heavily on credit cards, the Bank of England’s latest Money and Credit report reveals.
Net mortgage borrowing by individuals rose to £4.5 billion in November, up from £4.2 billion in October, the strongest monthly figure in several months.
The increase came despite a fall in gross lending, which slipped to £23.7 billion, as repayments dropped more sharply to £19.4 billion. Annual growth in net mortgage lending edged up to 3.3%, its highest rate since January 2023.
Mortgage approvals presented a mixed picture. Approvals for house purchase – a leading indicator of housing market activity – dipped slightly to 64,500, suggesting some cooling in buyer demand. However, remortgage approvals rose to 36,600, reflecting households continuing to refinance as they roll off cheaper fixed rates.
CONSUMER BORROWING UP
The effective interest rate on newly drawn mortgages increased for the first time since February, rising to 4.20% from 4.17% in October, while the rate on outstanding mortgages inched up to 3.90%.
Consumer borrowing also accelerated. Net consumer credit rose to £2.1 billion, up from £1.7 billion in October, driven by a sharp increase in credit card borrowing, which climbed to £1.0 billion. Annual consumer credit growth reached 8.1%, while credit card borrowing grew at 12.1%, its highest rate since early 2024.
Households continued to accumulate savings, depositing an additional £8.1 billion into bank and building society accounts, with strong inflows into ISAs and sight deposits. However, average interest rates on new time deposits eased slightly to 3.81%, extending a gradual downward trend in savings rates.
Pundits say that the figures show a housing market stabilising but not yet rebounding strongly, alongside consumers increasingly balancing higher living costs through unsecured borrowing.
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “Throughout 2025, it has been encouraging to see lenders offering increasingly competitive mortgage products, particularly any aimed at first-time buyers, helping to support activity despite wider economic uncertainty.
“The base rate cut introduced before Christmas is likely to further boost confidence as we head into 2026, making borrowing more affordable and encouraging more buyers to take the next step.
“Should base rates ease further over the course of the year, this would provide additional momentum for mortgage lending.
“With already greater levels of consumer flexibility than only twelve months ago, we hope this trend continues, with future reports hopefully reflecting growing confidence for those looking to purchase their first home or move further up the housing ladder.”
SETTING THE TONE
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “These figures are particularly interesting as they set the tone for housing market activity over the next few months at least and cover a period when worries about Budget tax changes were at their height.
“Although mortgage approvals dipped a little, buyers and sellers continued to demonstrate considerable resilience in view of the level of uncertainty, which bodes well for the market.
“Early signs this year have been encouraging although it is too early to say with any certainty whether the relief at lack of punitive tax measures will have a significant impact on decision-making.”
GOOD NEWS FOR BORROWERS
Jason Tebb, President of OnTheMarket, says: “Intense speculation ahead of the Budget and the repercussions it might have for the housing market had an impact on approvals for house purchases – an indicator of future borrowing.
“Even so, approvals decreased only slightly in November, underlining the overall resilience and determination from buyers and sellers alike to proceed with their moves.
“With the rate on newly-drawn mortgages increasing for the first time since February 2025, affordability challenges continue.
“However, the Bank of England base rate cut in December, with more expected to come this year, should provide borrowers with further relief. With lenders already cutting their mortgage rates this month as they try to get off to a strong start, there is further good news for borrowers.”
PENT-UP DEMAND
Simon Gammon, Managing Partner, Knight Frank Finance, says: “Mortgage approvals for house purchases dipped again in November following a similar fall in October.
“While this was partly due to uncertainty in the lead up to the Budget, other indicators like the Nationwide house price index suggest that the property market had a soft end to 2025.
“Given all the noise in the run up to the Budget, it looks like many buyers put plans on hold until after Christmas.
“That said, mortgage rates continued to ease through December, and anecdotal evidence from our brokers suggests that some pent-up demand should be released as we move towards spring.
“The lenders begin the year with fresh targets and we expect the larger lenders to be most aggressive in cutting rates in the first weeks of January.”
SPENDING BALANCE
Ian Futcher, Financial Planner at Quilter, says: “Many households continued to hold off on making any big financial decisions as they awaited clarity from the budget.
“Net mortgage approvals, an indicator of future borrowing, fell to 64,500, while net mortgage borrowing by individuals rose only slightly to £4.5bn in November, a modest uptick given it followed a £1bn decrease to £4.2bn in October.
“By contrast, approvals for remortgaging increased by 3,200 to 36,600 in November.
“This was likely driven by lower mortgage rates thanks to swap rates reducing throughout the month.
“Now the budget has passed and interest rates have been cut once more, the housing market should gradually pick back up, but households will continue to need to balance their spending, borrowing and saving decisions carefully.”
