MORTGAGE approvals for house purchases, an indicator of future borrowing, increased by 2,400 to 63,000 in May, according to Bank of England data published today.
This was the first increase since December 2024. Approvals for remortgaging (which only capture remortgaging with a different lender) also increased in May, by 6,200 to 41,500. This is the largest increase since February 2024 (6,600).
Meanwhile, net borrowing of mortgage debt by individuals increased by £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April. The annual growth rate for net mortgage lending increased slightly from 2.5% to 2.6% in May.
Gross lending increased to £20.4 billion in May, from £16.9 billion in April. While gross repayments decreased in May to £17.6 billion, from £18.2 billion.
Brokers welcomed the news that mortgage approvals rose and said a sense of normality was returning to the market after a period impacted by the stamp duty deadline earlier this year.
“A flicker of life in the housing market’s pulse”
Andrew Montlake, CEO at Coreco, said: “There’s a flicker of life in the housing market’s pulse, with today’s Bank of England figures confirming the first rise in mortgage approvals for house purchases since last year.
“An uptick of 2,400 to 63,000 may not sound seismic, but in a market that’s been starved of good news, it’s a welcome breath of air.
“A lot of activity this year to date has been skewed by the stamp duty deadline in April, but that is now in the rear-view mirror and this points to growing confidence among borrowers and a realisation that the new norm is here to stay, at least for now.
“Demand for mortgages is still there, even though rates appear to have stabilised for now.
“We’ve seen a lot of lender innovation around affordability in recent months and that may be starting to feed through into this data.
“It’s a market delicately balanced on sentiment and affordability but if lenders continue to price competitively and inflation holds its ground, we may just see these green shoots become more sustainable.”
“It’s now looking like business as normal”
Emma Jones, Managing Director at Whenthebanksaysno.co.uk, also welcomed the news: “Some good news today in the mortgage market, as May saw the first rise in mortgage approvals in 2025.
“The market has been blown off course slightly by the stamp duty holiday but it’s now looking like business as normal, at least more normal.
“All eyes are fixed on the next Bank of England rate decision, which could be decisive in the demand for mortgages in the late summer and into autumn.”
Ranald Mitchell, Director at Charwin Mortgages, said lenders becoming more aggressive was definitely a factor in the rise: “May’s uptick in mortgage approvals marks a turning point after months of market hesitancy.
“Purchases rose for the first time since December, and remortgages with new lenders saw the biggest increase in more than a year, a result of lenders becoming more aggressively competitive.
“Borrowers are becoming more proactive, either chasing better deals or looking to consolidate.
“At the same time, consumer credit borrowing fell sharply signalling that households are not splurging; they’re strategically restructuring.
“We’re seeing a clear trend of people using their mortgages to consolidate higher-cost debts as a way of managing ongoing cost-of-living pressures.
“This tactical borrowing can be a shrewd defensive play and one with borrowers shifting focus from spending to surviving in financially testing times.”
Pete Mugleston, Managing Director at Online Mortgage Advisor, commented: “This is good news and indicates that demand is still there despite the increase in Stamp Duty we saw in April.
“There were fears that the Stamp Duty increase might put people off moving or purchasing a home, but those fears appear to be unfounded.
“Whether this trend remains upward in the months to come could depend on what the Bank of England does at the next MPC meeting in August.
“A rate cut could lead to more entry into the housing market, which would be a sorely needed boost to the economy.”
Warning of headwinds ahead
Rob Peters, Principal at Simple Fast Mortgage, also welcomed the news but warned of headwinds ahead: “The increase in approvals shows tentative green shoots, suggesting some pent-up demand is coming through as rates stabilise.
“However, broader headwinds like wage stagnation, high inflation and uncertainty around rate cuts remain firmly in place.
“We’re seeing a market inching forward rather than charging ahead, but this uptick is a positive sign for brokers, lenders, and sellers alike as we enter the second half of the year.”
