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Mortgage approvals slipped slightly in November, while consumer borrowing rose at its fastest pace in almost two years. This combination suggests many households turned to credit to help manage higher seasonal spending, particularly in the run-up to Christmas.
Figures from the Bank of England’s Money and Credit report show that approvals for mortgages used to purchase homes fell to 64,500 in November. This was around 500 fewer than in October, marking a small but notable softening in buyer activity.
Despite the dip, the change was modest and does not point to a sharp slowdown. Instead, it reflects a period of caution as households weighed financial decisions towards the end of the year.
At the same time, remortgaging activity increased. Approvals for homeowners switching to a new lender rose by 3,200, reaching a total of 36,600, indicating continued interest in securing better mortgage deals.
Jason Tebb, president of property portal OnTheMarket, said the slight decline in approvals underlines the market’s overall resilience. He noted that buyers and sellers remain motivated to proceed with transactions despite ongoing economic challenges.
Simon Gammon, managing partner at Knight Frank Finance, suggested that uncertainty ahead of the Budget may have caused some buyers to pause their plans. Many, he said, appeared to delay decisions until after the Christmas period.
Gammon added that mortgage rates continued to ease throughout December. Feedback from brokers points to pent-up demand, which could begin to feed through as the market moves closer to spring.
He also expects lenders to start the year competitively, with fresh lending targets encouraging larger banks to cut rates early in January in an effort to attract new business.
Nathan Emerson, chief executive of Propertymark, said 2025 had been an encouraging year overall. He highlighted the growing availability of competitive mortgage products, particularly those aimed at first-time buyers.
Emerson added that the base rate cut announced before Christmas is likely to boost confidence as the market enters 2026. Lower borrowing costs could help make mortgages more affordable and prompt more buyers to take action.
While mortgage approvals softened, consumer borrowing increased sharply. The Bank of England reported that annual growth in consumer credit rose to 8.1% in November, up from 7.5% in October.
Credit card borrowing rose even faster, climbing by 12.1% year on year. This marked the highest level since January 2024 and reflects greater reliance on credit cards to manage festive spending.
Simon Trevethick, head of communications at StepChange Debt Charity, said the rise in borrowing highlights how difficult it has become for many households to cover everyday costs without using credit.
He added that while some people will be able to repay additional borrowing quickly, others may struggle and carry debt into the new year. He stressed that free, impartial debt advice is available to those who need support.
Karim Haji, global and UK head of financial services at KPMG, said the data points to ongoing financial pressure on consumers. He described the outlook as fragile, shaped by economic uncertainty and cautious spending as the UK heads into 2026.
Haji also noted that regulators are placing increased emphasis on customer protection. Lenders, he said, must ensure they meet expectations around consumer duty, fair value, and targeted support for those under strain.
Alongside rising borrowing, households continued to build savings. In November, deposits into banks and building societies totalled £8.1bn, up from £6.7bn in October, with £5.1bn going into ISAs.
Following speculation around changes to ISA rules, the government confirmed in the autumn Budget that the adult cash ISA allowance will be reduced to £12,000 from April 2027. The overall ISA limit will remain at £20,000, while over-65s will retain the full cash allowance.
The report also showed an increase in borrowing by UK non-financial businesses. Companies took out £6.3bn in net loans from banks and building societies in November, including overdrafts, following net repayments of £1.2bn the previous month.
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