Gross mortgage lending rose to £21.4bn in December, up from £20.8bn in November, and mortgage approvals are also on the rise, a report has shown.
According to the Bank of England’s Money and Credit statistics, mortgage approvals for house purchases came to 66,500 in December, a rise of 500 from November.
In November, mortgage approvals for house purchases dropped by 2,300 to 65,700.
The report noted that remortgage approvals dropped by 700 to 30,500, the second consecutive month of declines.
Net borrowing of mortgage debt came to £3.6bn in December, a rise of £1bn month-on-month.
The annual growth rate for net mortgage lending stood at 1.5% in December, up from 1.3% in November and “continuing the upward trend observed since April 2024”, the Bank of England said.

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Mortgage market outlook for 2025 ‘mixed’
Alice Haine, finance analyst at Bestinvest by Evelyn Partners, said consumer and business confidence had “taken a hit” since Chancellor Rachel Reeves announced £40bn in tax rises in her Autumn Statement, but buyers still took advantage of improving affordability based on lending figures.
She continued: “The outlook for 2025 is mixed. Buying activity in the first quarter is expected to ramp up as buyers rush through deals in a bid to beat the change in stamp duty thresholds at the start of April.
“The government’s decision not to extend the current relief on stamp duty thresholds beyond the end of March is likely to catalyse buying activity in the short term as buyers look to avoid a bigger tax bill, though demand may ease back beyond that point.”
Haine added that buyers and sellers were on “tenterhooks” to see if the interest rate would be cut further.
“Two quarter-point interest rate cuts have eased borrowing costs and improved affordability positions for many, but uncertainty around interest rate expectations has led to some volatility in the mortgage market.
“A sign of better times ahead was evident in the effective rate on newly drawn mortgages, which decreased by three basis points to 4.47% in December – the lowest level since April 2023. This offers hope that the financial pressures of the past few years are continuing to ease for borrowers,” she added.
Haine said borrowing costs “remain relatively high… with consumer confidence levels mired by uncertainty”, and buyers “may still be feeling nervous”.
“While businesses are set to bear the brunt of Reeves’ Autumn Budget tax grab, warnings of inflationary pressures – a result of companies passing on rising employment costs by hiking prices – along with the potential for slower wage growth and even job cuts, as companies rein in expenditure, pose challenges for consumers too.
“Any borrowers still holding onto cheap fixed rate loans – secured before the BoE began its tightening cycle more than three years ago – must prepare for a jump in mortgage repayments when they eventually refinance. This was evident in the rate for the outstanding stock of mortgages, which held at a similar level to the previous month as more people rolled off low-cost fixed rate deals,” she concluded.
Mortgage approvals are ‘hopeful’ sign for market activity
Stephanie Daley, director of partnerships at Alexander Hall, said 2024 was a “year of very positive growth for the mortgage sector”, and the rising mortgage approvals were due to a “stabilising property market, with more of the same expected… throughout 2025”.
She continued: “Whilst the fast-approaching stamp duty deadline will help to cultivate buyer activity levels in the short term, long-term health is also expected to be driven by the potential easing of loan-to-income caps, which will help improve affordability, as well as the expectation of further base rate reductions.
“This will help boost confidence amongst first-time buyers and next-steppers, with further support likely to be provided via the ongoing lender innovations being introduced to the market.”
Tomer Aboody, director of specialist lender MT Finance, agreed that the uptick in approvals and borrowing shows increased confidence in the market that was felt at the back end of the year.
He continued: “Interest rates may be higher than many are used to but remain at an affordable level compared to 2023, and further indications of another drop in rates is fuelling borrower confidence.
“With the October Budget implications yet to fully hit, we are hopeful that activity in the market continues to improve as borrowers’ ability to finance remains high.”