Mortgage borrowing by individuals reaches highest net level since November 2022

Individuals borrowed, on net, £2.8 billion of mortgage debt in July 2024, the Bank of England said in its monthly money and credit release published on 30 August 2024. That is the highest net level since November 2022, when the figure was £3.3 billion, and is up from £2.6 billion in June¹.

Net mortgage approvals for house purchases, which the Bank describes as an indicator of future borrowing, rose to 62,000 in July, the highest since September 2022 (65,100) and up from 60,600 in June. Approvals for remortgaging with a different lender fell to 25,100 from 27,300, continuing a downward trend since March 2024¹.

Gross mortgage lending decreased to £19.6 billion in July from £20.5 billion in June, while gross repayments fell by £0.9 billion over the same period to £17.4 billion. The annual growth rate for net mortgage lending rose to 0.6%, after 0.5% in June¹.

The effective interest rate, meaning the actual interest paid, on newly drawn mortgages was broadly unchanged at 4.81% in July. The rate on the outstanding stock of mortgages rose by 4 basis points to 3.69%, from 3.65% in June¹.

Consumer credit borrowing also increased. Net consumer credit borrowing rose to £1.2 billion in July from £0.9 billion in June. Within that, net borrowing through credit cards was stable at £0.5 billion, while net borrowing through other forms of consumer credit, such as car dealership finance and personal loans, rose to £0.7 billion from £0.4 billion¹.

Source: Bank of England, Money and Credit, July 2024¹

The annual growth rate for all consumer credit was little changed at 7.8% in July. The annual growth rate for credit card borrowing fell to 10.3% from 10.5%, while the rate for other forms of consumer credit was stable at 6.7%¹.

Effective interest rates on borrowing rose in several categories. The rate on interest-charging overdrafts rose by 21 basis points to 22.56%. The rate on interest-bearing credit cards rose by 33 basis points to 21.61%, from 21.28%. The rate on new personal loans to individuals rose by 21 basis points to 9.14%¹.

Household deposits with banks and building societies rose by £5.7 billion in July, driven by an additional £3.8 billion paid into ISAs and £3.3 billion into interest-bearing sight accounts. Households withdrew £0.5 billion from interest-bearing time accounts and £1.4 billion from non-interest bearing sight accounts¹.

Why it matters for households

The figures describe what households did with their money in July, not what any individual should do. Net mortgage borrowing of £2.8 billion is the amount by which new mortgage lending exceeded repayments across all individuals, so it reflects the aggregate of people taking out, extending or borrowing more on their mortgages against those paying them down or leaving the market¹.

Approvals data points to activity still in the pipeline: 62,000 house purchase approvals in July were the most since September 2022, while remortgaging approvals fell for a fifth month, to 25,100¹. The Bank's household borrowing figures cover both mortgage and consumer credit debt.

For existing borrowers, the rate on the outstanding stock of mortgages, at 3.69%, remains well below the 4.81% effective rate on newly drawn mortgages¹. That gap reflects the difference between rates agreed in earlier periods and those agreed now, and it narrows as fixed terms end and borrowers move onto new deals. Extending a mortgage term changes monthly payments and the total interest paid over the life of the loan.

On unsecured borrowing, the effective rate on interest-bearing credit cards rose to 21.61% and on new personal loans to 9.14% in July¹. Households added £5.7 billion to deposits with banks and building societies over the month, with ISA deposits accounting for £3.8 billion of that¹.

What happens next

The Bank of England's next money and credit release is scheduled for 30 September 2024¹. It will cover August 2024 and show whether the July rise in net mortgage borrowing and approvals continued. The Bank's rates and economy section carries its wider statistics, and the mortgages hub covers how mortgage products and terms work.