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BoE Mortgage Approvals January 25: "The rise in credit card borrowing is a red flag"

ended 03. March 2025

Net mortgage approvals for house purchases decreased by 300 to 66,200 in January, compared to an increase of 400 in December, according to Bank of England data published this morning. Approvals for remortgaging increased by 2,200 to 32,900, after falling for the previous two months. Net borrowing of mortgage debt by individuals rose by £0.9 billion, to £4.2 billion in January. Meanwhile, net consumer credit borrowing by individuals was £1.7 billion in January, up from £1.1 billion in the previous month. Within this, net borrowing through credit cards increased to £1.1 billion from £0.4 billion, and was the highest increase since November 2023. Newspage asked experts for their views, below.

8 responses from the Newspage community

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Andrew MontlakeVerified
CEO at Coreco
Activity levels were fairly robust in January. With the New Year come new plans and often those plans involve moving home or buying your first one. It's been an unpredictable start to the year on the rate front but demand has held up, especially in January as there was still a chance to beat the stamp duty deadline. Currently rates are on the way down again so while there may be a slight drop-off due to the end of the stamp duty holiday we are not expecting a cliff-edge. A few lenders I have spoken to recently are bullish about the rest of the year and definitely think mortgage lending will be up this year. They're expecting more first-time buyer activity, lots more remortgage business and a surge in activity from professional landlords as their amateur counterparts exit in their droves. Though there are doubtless headwinds, 2025 is shaping up to be a year when the mortgage market goes through the gears. The spike in credit card borrowing may reflect the growing strain on households.
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Katy EatentonVerified
Mortgage & Protection Specialist at Eatenton Finance
The rise in credit card borrowing is a red flag and should be closely monitored by the Bank of England. Households around the UK are under immense pressure and many have no option but to borrow to keep up with their outgoings. This, of course, simply kicks the can down the road.
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Babek IsmayilVerified
CEO at homebuying platform OneDome
Demand for mortgages in January was steady, with many people looking to secure their financial positions for the year ahead. February followed a similar trend, with a slight uptick as people began to feel more confident about the future. We've seen a mix of remortgage activity and first-time buyers taking advantage of competitive rates. Despite the positive trends, borrowers are contending with challenges such as rising house prices, which increased by 4.1% annually as of January, according to Nationwide. First-time buyers have been particularly active, trying to benefit from stamp duty exemptions before the thresholds change in April. We anticipate that demand will remain robust. The Bank of England's recent interest rate cuts are expected to stimulate borrowing and forecasts suggest that UK mortgage lending growth will increase. Initial urgency has passed but the combination of favorable borrowing conditions and ongoing demand is likely to maintain, if not enhance, market activity.
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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
January’s mortgage approvals data confirms what we’ve been seeing on the ground, a significant uplift in remortgage activity and steady purchase activity, and February was similar. Buyers and homeowners are no longer waiting on the sidelines, instead choosing to move forward with their plans rather than second-guessing economic uncertainty. The buy-to-let sector is also showing signs of steady recovery as landlords adjust to the evolving market. There is a growing acceptance that the rock-bottom interest rates of the past decade won’t return, and consumers are now making decisions based on today’s reality rather than waiting for the ‘perfect’ moment. With confidence improving and borrowing conditions stabilising, 2025 is shaping up to be a strong year for mortgage lending.
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Ben PerksVerified
Managing Director at Orchard Financial Advisers
Mortgage approvals for January were pretty lively. A small dip on the purchases but remortgages saw a whopping increase. Despite the topsy turvy nature of rates throughout January, mortgage lending remains robust. I suspect these approval figures will go from strength to strength throughout the year.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
January saw a strong surge in mortgage demand with approvals holding steady at 66,200, and February has maintained this positive momentum as borrowers show renewed confidence in making property decisions. The biggest challenge remains affordability, with property prices outpacing wage growth. First-time buyers have been particularly active ahead of April's stamp duty threshold changes, while remortgages saw impressive growth with approvals jumping by 2,200 in January. With rates stabilizing and lender confidence growing, we expect only a modest slowdown rather than a cliff-edge drop once the stamp duty deadline passes.
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Pete MuglestonVerified
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
January mortgage approvals remained steady, with only a slight dip in house purchase approvals, suggesting demand is holding firm despite economic uncertainty. The rise in remortgaging approvals reflects borrowers locking in deals as rates fluctuate. A key challenge for buyers remains affordability, with lenders maintaining strict criteria. Higher net borrowing and increased consumer credit usage indicate that households are feeling the squeeze, which could impact future mortgage demand. First-time buyers remain active, driven by falling rates, while the buy-to-let market continues to lag. Demand may stabilise rather than drop, especially if lenders keep reducing rates to stay competitive.
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Iain SwattonVerified
Director at Exemplar Financial Services
The latest Bank of England Mortgage Approvals data shows net borrowing rising by nearly £1bn to £4.2bn, driven by a surge in remortgaging activity. Approvals for house purchases dipped slightly, reflecting ongoing affordability challenges amid volatile mortgage rates that continue to stress both buyers and remortgagers. However, demand for mortgages in early 2025 remains positive. Notably, first-time buyer activity is up as many rush to beat forthcoming stamp duty changes. While FTB demand may ease after these changes take effect, the high number of expiring mortgage products this year should help keep overall demand strong.