Net borrowing of mortgage debt by individuals increased by £900m in January to £4.2bn, new Bank of England (BoE) figures have shown.

The latest total followed a rise of £1.1bn in net borrowing in December.

The growth in mortgage borrowing came despite a slight fall in net mortgage approvals for house purchases in January. The BoE’s latest figures showed that net approvals dipped by 300 to total 66,200 in January, following an increase of 400 in December.

Approvals for remortgaging, which only captured remortgaging with a different lender, showed an increase, however, by 2,200 to 32,900, having fallen over the previous two months.

The BoE’s data also revealed that the annual growth rate for net mortgage lending increased to 1.8% in January from 1.5% in December, continuing an upward trend observed since April last year.

Gross lending was little changed in January at £21.3bn, while gross repayments decreased to £16.3bn, from £18.5bn in December.

Head of mortgages at Moneybox, Felicity Holloway, commented: “The initial momentum sparked by the Autumn Budget seems to be settling down as time has begun to run out for first-time buyers to complete ahead of stamp duty relief coming to an end.

“While overall mortgage approvals are up, the surge in house purchases we saw in December largely in response to the imminent tax changes has now subsided and many first-time buyers are hitting pause while they consider their next steps.”

Chartered financial planner at Quilter Cheviot, Rosie Hooper, added: “Today’s figures reinforce the idea that while the housing market is not in freefall, it remains sluggish, with borrowers constrained by affordability pressures.

“With the road ahead for rate cuts still not completely clear, the coming months will be key in determining whether borrowing and spending activity start to accelerate more meaningfully.”

---