Net borrowing of mortgage debt by individuals across the UK slipped to £1.6bn in October, new data published by the Bank of England (BoE) has revealed.

The figure is down from £9.3bn in September and is the lowest monthly total since July this year, when individuals repaid mortgage debt totalling £2.2bn.

According to the BoE, October’s decrease was driven by borrowing brought forward to September to take advantage of stamp duty land tax relief, before it was completely tapered off.

The figure for net borrowing in October was also £4.6bn below the 12-month average to June 2021, when the full stamp duty holiday was in effect.

Elsewhere, the figures showed that approvals for house purchases, which is an indicator of future borrowing, fell to 67,200 in October, from 71,900 in September. This is the lowest total since June 2020 and is close to the 12-month average up to February 2020 of 66,700.

Approvals for remortgaging – which only capture remortgaging with a different lender – rose slightly to 41,600 in October but remains low compared to the 12-month average up to February 2020 of 49,100.

According to managing director at national conveyancing firm ONP, Adam Forshaw, a sharp downturn in mortgage lending in October was to be expected, as the market “calms down” following the end of the stamp duty holiday.

“The net lending figure of £1.6bn is low but it follows the same pattern of the three deadlines this year in March, June and September,” Forshaw commented. “Remortgaging approvals increased slightly but we expect to see more of this as a significant number of five-year fixed rate mortgages are due for renewal in the coming months.”

Just Mortgages national operations director, John Phillips, added: “While the urgency has been taken out of the market, and approvals for purchases fell slightly in October, there is still significant interest in purchasing. Outside space is still highly desirable, and the trend for working from home seems set to stay for a significant number of employees, resulting in some looking to move.

“With rates at a new series low, approvals for remortgaging increased. This trend is set to continue, with remortgaging taking centre stage in the final month of the year.”

Elsewhere, the BoE figures showed that individuals borrowed £700m in consumer credit on net in October. The majority of this was £600m of additional borrowing on credit cards, which is the strongest net borrowing since July 2020.

Individual borrowing in other forms of consumer credit, such as car dealership finance and personal loans, accounted for the other £100m of net lending.

Hargreaves Lansdown senior personal finance analyst, Sarah Coles, said: “The spending squeeze has helped to spark the return of the credit card, and a slowdown in savings. Over the past couple of months, credit cards have made a comeback, with borrowing of £600m in both September and October.

“Meanwhile, our enthusiasm for saving has waned. Savings fell to their lowest since the onset of the pandemic on October. It’s less than half the average of the past 12 months, and isn’t far from pre-pandemic averages.

“With the spending squeeze likely to inflict pain over the coming months, this could mean a pattern of borrowing more and saving less could be here to stay.”

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