In a significant development for the British housing market, May saw a robust increase in mortgage approvals, outperforming forecasts and suggesting renewed vigor in property transactions. This positive shift is a welcome sign after a recent contraction in mortgage debt, with remortgaging playing a key role in the latest surge.
The Bank of England's recent credit data for May 2025 revealed that mortgage approvals reached 63,030, exceeding the anticipated figure of 59,750. This marks an improvement from the revised April figure of 60,660. Concurrently, net borrowing of mortgage debt by individuals saw a substantial increase, rising by £2.8 billion to reach £2.1 billion. This follows a significant reduction in net borrowing during April, which saw a decrease of £13.8 billion, resulting in a negative £0.8 billion.
A notable aspect of this growth is the increase in approvals for remortgaging, which climbed by 6,200 to a total of 41,500. This represents the most considerable rise in remortgaging activities observed since February 2024, highlighting a potential trend of homeowners seeking to adjust their mortgage terms in the current economic climate. The broader credit landscape also showed changes, with net consumer credit reported at £0.9 billion for May, a decrease from the revised April figure of £1.9 billion.
These figures collectively point to a strengthening of the UK's housing finance sector. The increase in mortgage approvals suggests a growing confidence among buyers and homeowners, potentially fueled by more favorable lending conditions or a renewed appetite for property investment and refinancing. The Bank of England's data provides crucial insights into the health of the consumer lending market and its implications for the wider economy.
Overall, the latest data from the Bank of England indicates a positive trajectory for the UK mortgage market in May, with an unexpected rise in approvals and a rebound in net mortgage borrowing, particularly driven by an increase in remortgaging activities.