Bank of England Money & Credit Report June 2025
Net borrowing of mortgage debt by individuals increased by £3.1 billion to £5.3 billion in June, compared to a £2.8 billion increase to £2.2 billion of net borrowing in May.
Net mortgage approvals for house purchases increased by 900, to 64,200 in June. Approvals for remortgaging also increased by 200, to 41,800 in June. This marked the highest number of approvals for remortgaging since October 2022 (50,000).
Net borrowing of consumer credit by individuals rose to £1.4 billion, from £0.9 billion in the previous month. Within this, net borrowing through credit cards increased to £0.7 billion in June, from £0.2 billion in May. Net borrowing through other forms of consumer credit remained broadly unchanged at £0.7 billion over the same period.
The annual growth rate of borrowing by large businesses decreased to 6.7% in June. The annual growth rate of borrowing by SMEs increased from -0.2% to 0.3%, the first month of positive growth rate since August 2021 (1.3%).
Private non-financial corporations (PNFCs) borrowed, on net, £1.0 billion of finance in June, following net borrowing of £1.2 billion in May.
The net flow of sterling money (known as M4ex) was £11.3 billion in June, compared to £5.6 billion in May. Within this, households increased their holdings of money by £7.8 billion, which was mainly driven by households depositing an additional £3.6 billion into ISAs and £1.2 billion into interest bearing sight accounts. NIOFCs and PNFCs also increased their holdings of money, by £2.5 billion and £1.0 billion respectively.
The flow of sterling net lending to private sector companies and households (M4Lex) was £18.9 billion in June, compared to £8.5 billion in May. This was the highest net lending since September 2022 (£25.2 billion), and was driven by increases of £10.3 billion, £5.0 billion, and £3.5 billion in net lending to NIOFCs, households and PNFCs, respectively.
Net borrowing of mortgage debt by individuals increased by £3.1 billion to £5.3 billion in June, compared to a £2.8 billion increase of net borrowing to £2.2 billion in May. The annual growth rate for net mortgage lending rose from 2.6% to 2.8% in June. Gross lending increased to £23.9 billion in June, from £20.6 billion in May. Gross repayments also rose in June, to £18.8 billion, from £17.6 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 900 to 64,200 in June. Approvals for remortgaging (which only capture remortgaging with a different lender) also increased, by 200, to 41,800 in June. This marked the highest number of approvals for remortgaging since October 2022 (50,000) (Chart 1).
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased for the fourth consecutive month, to 4.34% in June from 4.47% in May. However, the rate on the outstanding stock of mortgages increased slightly, to 3.88% from 3.87%.
Nathan Emerson, CEO of Propertymark, comments:
“This is a positive sign at a time when there is a poor economic outlook in general and potential tax rises on the way.
“The Chancellor’s recent Leeds Reforms sent a positive signal to the mortgage market, which should encourage many lenders to focus new products and services towards those on lower incomes to help them take their first step onto the housing ladder.”
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