29th Sep 2026 09:45
(Alliance News) - UK mortgage borrowing increased in August despite a further decline in mortgage approvals, while consumer credit borrowing accelerated, figures from the Bank of England showed on Tuesday.
Net borrowing of mortgage debt by individuals rose to GBP4.4 billion in August from GBP4.1 billion in July, but remained below the previous six-month average of GBP5.2 billion.
The annual growth rate of net mortgage lending was unchanged at 3.6%.
However, net mortgage approvals for house purchases, an indicator of future borrowing, fell to 54,900 in August from 55,900 in July. This was below the previous six-month average of around 60,100.
Approvals for remortgaging with a different lender declined to 34,000 from 34,600.
Gross mortgage lending fell to GBP23.6 billion from GBP25.3 billion in July, while repayments decreased to GBP20.4 billion from GBP21.1 billion.
Meanwhile, the effective interest rate paid on newly drawn mortgages increased to 4.60% in August from 4.45% in July. The rate on the outstanding stock of mortgages edged up to 4.00% from 3.97%.
Consumer borrowing picked up during the month. Net consumer credit borrowing increased to GBP2.5 billion in August from GBP2.1 billion in July, above the previous six-month average of GBP1.9 billion.
Credit card borrowing rose to GBP1.2 billion from GBP900 million, while other forms of consumer credit, including car finance and personal loans, increased to GBP1.3 billion from GBP1.2 billion.
The annual growth rate of consumer credit accelerated to 9.6% from 9.3%. Credit card borrowing grew 13.3% annually, accelerating from 12.6%, while growth in other forms of consumer credit edged up to 7.9% from 7.7%.
The effective rate on interest-charging credit cards increased to 21.55% from 21.45%, while the rate on new personal loans rose to 9.96% from 9.86%.
Households deposited GBP4.7 billion with banks and building societies during August, up from GBP3.8 billion in July. This included GBP4.4 billion deposited into individual savings accounts.
Separately, UK non-financial businesses borrowed a net GBP4.1 billion in bank loans during August, up from GBP1.9 billion in July. Large businesses borrowed GBP3.2 billion, while small and medium-sized businesses borrowed GBP900 million.
Private non-financial corporations raised a net GBP7.7 billion of finance during August, following virtually no net financing in July. This included GBP5.7 billion of borrowing through bank and building society loans and GBP500 million of net bond issuance.
By Eva Castanedo, Alliance News senior economics reporter
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