Lenders are offering increasingly competitive mortgage deals, helping to keep the housing market active despite wider economic pressures.
Net borrowing by individuals rose to £4.5bn in November, up from £4.2bn in October, according to the latest Bank of England money and credit data.
The increase came even as mortgage approvals for house purchases slipped slightly, falling by 500 to 64,500. Approvals for remortgaging, however, climbed by 3,200 to 36,600.
Gross mortgage lending dropped by £0.6bn to £23.7bn, while repayments fell more sharply by £3.1bn to £19.4bn.
The annual growth rate for net mortgage lending rose to 3.3%, the strongest since January 2023.
Meanwhile, effective interest rates on newly drawn mortgages increased for the first time since February 2025, rising to 4.20% in November from 4.17% in October. Rates on the outstanding stock of mortgages also edged up to 3.90% from 3.89% the previous month.
Jason Tebb, president of OnTheMarket, said intense speculation ahead of the Budget and the repercussions it might have for the housing market had an impact on approvals for house purchases – an indicator of future borrowing.
“Even so, approvals decreased only slightly in November, underlining the overall resilience and determination from buyers and sellers alike to proceed with their moves,” he said. “With the rate on newly-drawn mortgages increasing for the first time since February 2025, affordability challenges continue. “However, the Bank of England base rate cut in December, with more expected to come this year, should provide borrowers with further relief.”
“With lenders already cutting their mortgage rates this month as they try to get off to a strong start, there is further good news for borrowers,” Tebb added.
Nathan Emerson, CEO of Propertymark, commented: “Throughout 2025, it has been encouraging to see lenders offering increasingly competitive mortgage products, particularly any aimed at first-time buyers, helping to support activity despite wider economic uncertainty.
“The base rate cut introduced before Christmas is likely to further boost confidence as we head into 2026, making borrowing more affordable and encouraging more buyers to take the next step.
“Should base rates ease further over the course of the year, this would provide additional momentum for mortgage lending.
“With already greater levels of consumer flexibility than only twelve months ago, we hope this trend continues, with future reports hopefully reflecting growing confidence for those looking to purchase their first home or move further up the housing ladder.”