UK mortgage approvals decreased slightly at the start of 2025, while consumer credit increased, according to data from the Bank of England.
Mortgage approvals in January came to roughly 66,200, down from around 66,500 at the end of last year but higher than the 65,500 that economists expected.
This meant net borrowing of mortgage debt by individuals rose by £0.9 billion to £4.2 billion in January, the central bank said.
Net consumer credit borrowed by individuals was £1.7 billion in January, up from £1.1 billion the prior month. Credit card debt increased to £1.1 billion from £0.4 billion, and was the highest increase since November 2023.
Net borrowing of mortgage debt by individuals increased by £0.9 billion to £4.2 billion in January, following an increase in net borrowing of £1.1 billion in December.
The annual growth rate for net mortgage lending rose to 1.8% in January from 1.5% in December, with the bank noting that this continued an upward trend observed since April 2024.
Gross lending was roughly flat at £21.3 billion, while gross repayments decreased to £16.3 billion, from £18.5 billion in December.
Net lending to property totalled £917 million, down from £1.28 billion in December, but close to the average seen over 2024.
Lending for development saw a turnaround from a negative £28 million in December to £185 million.
This was the highest monthly figure since October 2021, said Matthew Pointon, senior commercial real estate economist at Capital Economics.
"While still a low figure, that supports our view that commercial property development isn’t grinding to a halt. After all, the sources of development financing have expanded over the past few years and we expect new starts will hold up even in the troubled office sector.
"Looking ahead, with interest rates falling back and commercial property values now rising, we expect net lending to remain positive over the next year, supporting a gradual recovery in investment."