Bank of England monthly statistics show that net borrowing of mortgage debt by individuals increase by £3.1 billion to £5.3 billion in June. Net mortgage approvals for house purchases increased by 900, to 64,200, and approvals for remortgaging were up by 200, to 41,800 – the highest number of approvals for remortgaging since October 2022.
The news was welcomed as a broadly positive sign by property and finance experts, with relaxed regulation and the recent Leeds Reforms credited with the slight upturn.
Richard Pinch, senior director of risk at financial services consultancy Broadstone, commented:
“Despite ongoing market uncertainty, the direction of travel for mortgage rates appears to be downward at least in the short-term which should support sentiment when we reach the Autumn.
“Meanwhile, the ongoing efforts of the FCA to ease regulation in the mortgage market to support home ownership should also drive increased lending once those reforms begin to take effect.”
Propertymark CEO Nathan Emerson noted:
“The Chancellor’s recent Leeds Reforms sent a positive signal to the mortgage market, which should encourage many lenders to focus new products and services towards those on lower incomes to help them take their first step onto the housing ladder.”
Zoopla executive director Richard Donnell said he expects demand to continue. He said:
“Demand for mortgages to buy homes increased in June as stable mortgage rates and changes to mortgage affordability encouraged more buyers agree home purchases. Zoopla data shows unusually high levels of housing market activity for the early summer with sales agreed up 8% on last year and 11% more buyers in the market. While activity levels are higher this isn’t feeding into house price inflation which is slowing. We expect increased housing activity to support demand for mortgages in the rest of the year.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said the monthly increase is positive, even if marginal. He added:
“While the summer period may slow things slightly, it’s encouraging to see some momentum building in the mortgage market, with prospective buyers and movers buoyed by ever-growing innovation among lenders and an increasing spotlight on improving affordability and access to new mortgages. Although the jury may still be out on its decision, all eyes will be on the MPC meeting next month and whether we see another cut to the base rate.”
However, Ian Futcher, financial planner at wealth management company Quilter, said the figures illustrate the pressures the housing market continues to face, and pointed out the low rate of net mortgage approvals for house purchases. He commented:
“Net borrowing had fallen off a cliff in April, the first month post stamp duty changes, but this has been steadily increasing since. Net borrowing increased by £3.1 billion to £5.3 billion in June. This is up from £2.2 billion of net borrowing in May, but is still a far cry from the £13.0 billion seen in March. However, net mortgage approvals for house purchases, which is indicative of future borrowing, increased only marginally.
“The figure rose by just 900 to 64,200 in June and suggests prospective buyers have taken their foot off the pedalahead of the summer months. Remortgages were similarly light, with approvals up just 200 to 41,800 in June – though this small increase tipped it over to the highest number of approvals for remortgaging since October 2022.
“With the summer holidays now in full swing, we could see a slowdown as trips abroad take precedence over moving home. The market is used to a dip in momentum during this time of the year but having already had a fairly slow start to 2025, we could see this lull have a knock-on effect on house prices. However, while we may not see activity pick up until nearer the autumn, by that time the stamp duty changes will have sunk in. Buyers will have no choice but to adjust to the new norm if they wish to move home, and we could see the market pick up some pace as a result.”
And Sarah Coles, head of personal finance at Hargreaves Landsdown, said the increase isn’t ‘earth shattering’ but should lead to solid demand. She explained:
“The mortgage market is staging a small recovery, with approvals for purchases rising for the second consecutive month after falling for four. It’s a slow climb, but the direction of travel is important, and demonstrates that the end of the stamp duty holiday hasn’t brought the market to a dead end.
“In context, none of these moves are earth shattering. Approvals for purchases came in at 64,200. Last year, approvals averaged 62,700 a month. So far this year, they are averaging 64,400. The year before the pandemic, the 12-month average was 66,700. It means this is a relatively steady set of figures.
“As a result, late summer and early autumn won’t shoot the lights out. We should see reasonably solid demand after RICS reported a slight pick up in buyers, sellers and sales in June. Property prices, however, remain relatively flat, and aren’t set to ramp up significantly in the immediate future.”
