Net borrowing of mortgage debt by individuals across the UK climbed to £3.7bn in November, up from £1.1bn in October, new Bank of England (BoE) figures have revealed.

The Bank confirmed that November’s increase follows low net lending figures in October after borrowing was brought forward to September to take advantage of the government’s stamp duty relief, before it was completely phased out.

However, net borrowing in November was £2.9bn below the 12-month average to June 2021, when the full stamp duty holiday was in effect.

Figures also showed that gross lending increased to £22.1bn in November, up from £19.5bn in October, while gross repayments saw a rise from £18.2bn to £19.4bn in October.

The BoE’s latest statistics also showed that approvals for house purchases, which are an indicator of future borrowing, remained relatively unchanged at 67,000 in November, the lowest total since June 2020 when approvals reached 40,500. However, the figure was close to the 12-month average up to February 2020 of 66,700.

Furthermore, approvals for remortgaging –which only capture remortgaging with a different lender – climbed to 44,500 in November. The BoE suggested this remains low compared to the 12-month average up to February 2020 of 49,500, but is still the highest total since February 2020, when remortgage approvals were at 52,500.

Commenting on the figures, Coreco managing director, Andrew Montlake, said: “We’re expecting 2022 to be a record year for remortgage activity with a huge amount of borrowers coming to the end of their existing mortgage products, all of whom will be keen to fix in early to the lowest rates available.

If Omicron continues to prove to be a milder strain and the economy continues to recover we could well see another one or two slight increases in interest rates this year, although this won't be anything too dramatic despite the Bank of England's ongoing battle with inflation.

“Lenders, meanwhile, will continue their rate wars, with the top six banks awash with cash to lend and new lenders determined to get a foothold and increase their market share. We will also continue to see lenders improve their criteria to appeal to more borrowers, who will be further helped if there is a general relaxation of the stress tests.

The BoE’s latest data also confirmed November’s consumer credit figures, which showed that individuals borrowed £1.2bn in consumer credit during the month. According to the figures, the majority of this was £0.9bn 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, amounted to £0.4bn of net lending.

Hargreaves Lansdown senior personal finance analyst, Sarah Coles, said: “Consumer borrowing saw its first positive annual growth since the onset of the pandemic, while savings were less than half the average of the previous 12 months, and even below pre-pandemic levels.

“The spending squeeze has put our budgets under real pressure, with prices rising on all sides, and inflation hitting 5.1% in November. Many of us have turned to credit cards to close the gap, as the price of everything from energy bills to filling up the car or supermarket trolly has soared.”

Coles added: “The timing couldn’t have been worse, as rates on loans and overdrafts started to climb towards the end of the year, as concerns about inflation led to speculation that the Bank of England was set to raise rates. The rise from 0.1% to 0.25% was eventually put off until December, but was priced into the cost of borrowing well before then.”

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