Gross mortgage lending came to £20.7bn in November, a small rise from the £20.3bn lent in October, figures from the central bank showed.
The Bank of England Money and Credit report found that despite this increase in lending, mortgage approvals for house purchase dropped by 2,400 to a total of 65,700. However, this was still above the previous 12-month average of 60,400.
There was also a decline in remortgage approvals, which fell by 300 to a total of 31,200. Again, this was higher than the previous 12-month average of 30,000.
Dented consumer confidence post-Budget
Mortgage and housing sector professionals said the drop in mortgage approvals suggested the Budget had a negative impact on consumer confidence.
Mark Harris, chief executive of SPF Private Clients, said this came “as a surprise and suggests ups and downs for the market in coming months rather than a steady improvement”.
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Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, said approvals were “arguably the most interesting piece of the housing market jigsaw”.
He added: “These numbers reflect direction of travel for the next few months at least and show that buyers paused for breath after the pre-Budget rush to possibly avoid higher taxes.”
Tomer Aboody, director of MT Finance, said: “The decline in net mortgage approvals after months of increases shows we can take nothing for granted, with consumer confidence perhaps taking a hit after the Budget. Further interest rate cuts, which are expected in the new year, should help boost those numbers and get them back on track.
“Despite lower borrowing rates, we are still living in a higher cost environment than most of us are used to. Sellers may try to charge a premium because the cost of everything is higher, but are likely to find that buyers aren’t prepared to pay it.”
Newly drawn mortgage rates at lowest for over a year
The Bank of England’s data showed that the interest rate on newly drawn mortgages fell by 11 basis points in November to average 4.5%. This was the lowest average rate for new mortgages since April 2023.
Meanwhile, the rate on the outstanding stock of mortgages rose slightly from 3.78% to 3.8%, which was a series high.
Drop in net mortgage debt
In November, the net borrowing of mortgage debt decreased by £1bn to £2.5bn, offsetting the £1bn rise recorded in October.
The annual growth rate for net mortgage lending rose to 1.3% in November from 1.1% in October, continuing the upward trend observed since April 2024.
Gross mortgage repayments stayed relatively unchanged at £18bn, the figures showed.
