2nd Jun 2025 09:49
(Alliance News) - Mortgage borrowing by UK households plunged in April, while credit card spending surged, according to Bank of England data published Monday.
Net mortgage borrowing fell to negative GBP800 million in April from a sharp rise of GBP13.0 billion in March, marking the first net repayment since late 2023. Gross lending dropped to GBP16.9 billion from GBP39.9 billion – the steepest monthly fall since June 2021 – while repayments eased to GBP18.4 billion from GBP23.7 billion.
Mortgage approvals for house purchases declined for the third consecutive month, slipping by 3,100 to 60,500. Remortgage approvals, however, rose by 1,600 to 35,300.
The slowdown in purchase approvals comes amid the impact of new stamp duty thresholds that took effect on April 1.
As part of her October budget, Chancellor Rachel Reeves announced the government would lower the thresholds in England and Northern Ireland. Buyers must now pay stamp duty on properties priced over GBP125,000, down from GBP250,000 previously. First-time buyers face the tax on homes over GBP300,000, compared with a higher GBP425,000 threshold before the change.
The Bank of England also reported that consumer credit borrowing rose to GBP1.6 billion in April from GBP1.1 billion in March, driven by a doubling in credit card borrowing to GBP800 million. The annual growth rate for total consumer credit picked up to 6.7% from 6.2%, while credit card borrowing accelerated to 9.8%.
Household deposits grew by GBP3.0 billion, helped by record ISA inflows of GBP14.0 billion. Withdrawals from sight deposits partly offset the gain.
For businesses, private non-financial corporations repaid GBP2.4 billion in April, including GBP3.2 billion in equity buybacks and GBP800 million in bond redemptions. Business deposits declined by GBP7.0 billion after a strong March inflow.
By Eva Castanedo, Alliance News reporter
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