The latest Credit Conditions Survey from the Bank of England shows an increase in demand for secured lending for both house purchase and remortgaging in Q2.
Lenders said they expect the demand for remortgaging to continue into Q3, but expected demand for house purchase borrowing to decrease.
The survey is based on changes reported by lenders in the three months to the end of May 2025 (Q2), relative to the period between December and February, and expected changes in the three months to the end of August 2025 (Q3), relative to the period between March and May.
Richard Pinch, the senior director of risk at independent financial services consultancy Broadstone, said the growth in demand for mortgage borrowing is likely to have been fuelled by the stamp duty changes, but could also point to increased consumer confidence.
He explained:
“Lenders expect to see a further expansion in the availability of credit over the coming months which should further stimulate economic activity in the UK off the back of 0.7% growth in GDP through Q1, a significant increase compared to the prior quarter.
“Increasing demand for borrowing in Q2 suggests strengthening consumer confidence, but the growth in demand for mortgage borrowing is likely to have been driven by the end of the Stamp Duty holiday at the end of March.
“Market volatility never appears far away – as yesterday’s movement in bond and currency markets reminded investors – and the likelihood of tax rises at the Autumn Budget is growing, but for now market sentiment remains resilient.”
See the full survey and data tables at https://www.bankofengland.co.uk/credit-conditions-survey/2025/2025-q2
