After weak numbers in April the latest Bank of England Money and Credit report points to a more confident mortgage market.

Net borrowing of mortgage debt by individuals increased by £2.8bn to £2.1 bn in May, following a large decrease in net borrowing of £13.8bn to -£0.8 bn in April.

The annual growth rate for net mortgage lending increased slightly from 2.5% to 2.6% in May.

Gross lending increased to £20.4bn in May, from £16.9bn in April. Gross repayments decreased in May to £17.6bn, from £18.2bn.

Net mortgage approvals for house purchases, an indicator of future borrowing, increased by 2,400 to 63,000 in May. This was the first increase since December 2024.

Approvals for remortgaging (which only capture remortgaging with a different lender) also increased in May, by 6,200 to 41,500. This is the largest increase since February 2024.

Commenting on the latest data Propertymark chief executive Nathan Emerson said: “It is incredibly positive news to see an increased number of mortgage applications approved. It is one of the loudest signals of them all regarding consumer affordability, and it is also a massive vote of confidence from lenders in the longer-term prospects of the economy too.

“As we head into the summer months, we have witnessed on average the number of viewings per property available see an uplift of around 30% compared to the month previous.”

He added: “On top of this, we have also seen the UK Government make a pledge to create a National Housing Bank which could bring significant investment to help build 500,000 new homes, enabling a potential greater degree of flexibility for those who aspire to buy.”

KPMG global and UK head of financial services Karim Haji said May’s uptick in mortgage approvals bucked the downward trend seen throughout the year so far. “The gradual easing of interest rates could be helping to boost confidence and demand amongst mortgage borrowers.

“The cost of living remains high, but a drop in consumer borrowing in May signals that rising incomes are starting to feed through to the cost of day-to-day expenses.”

He added: “Borrowers may also be awaiting further movement on the Bank of England’s base rate before deciding to take out more credit although falling mortgage rates may help increase confidence and appetite.”