UK borrowing rose in November as households took on more mortgage and consumer credit, while businesses returned to net borrowing after repaying debt the
previous month, according to money and credit data released by the Bank of England on Monday.
Net mortgage borrowing by households increased to £4.5 billion in November from £4.2 billion in October, reversing the previous month’s decline. The annual growth rate of net mortgage lending edged up to 3.3%, from 3.2%, marking its fastest pace since January 2023.
Mortgage approvals for house purchases slipped slightly, falling by 500 to 64,500, pointing to a modest cooling in future housing demand. By contrast, approvals for remortgaging jumped by 3,200 to 36,600, suggesting households continued to refinance as borrowing conditions evolved.
The Bank of England cut its policy rate four times during 2025 — in February, May, August and December — helping to ease overall financing conditions, though some borrowing costs showed signs of stabilising.
The effective interest rate on newly issued mortgages rose for the first time since February last year, nudging up to 4.20% in November from 4.17% in October. The average rate on the existing stock of mortgages also inched higher to 3.90%.
Consumer credit accelerates
Consumer credit growth strengthened during the month. Net borrowing by individuals rose to £2.1 billion in November from £1.7 billion in October, driven largely by increased credit card use.
Net credit card borrowing climbed to £1.0 billion, up from £700 million, while borrowing through other forms of consumer credit — including car finance and personal loans — edged up to £1.1 billion.
The annual growth rate of total consumer credit accelerated to 8.1%, from 7.5%, with credit card borrowing growth reaching 12%, its fastest pace since January 2024.
Borrowing costs for unsecured lending continued to rise. The effective interest rate on new personal loans increased for a fourth consecutive month to 8.7%, while credit card rates edged up to 22%. Overdraft rates, however, fell to 22%.
Household savings still rising
Despite higher borrowing, households continued to add to savings. Household deposits increased by £8.1 billion in November, up from £6.7 billion in October.
The rise was driven by inflows into interest-bearing sight deposits, individual savings accounts and non-interest-bearing accounts, partly offset by withdrawals from time deposits. Interest rates on household deposits continued to drift lower.
Business borrowing rebounds
Business lending rebounded during the month. UK non-financial companies borrowed a net £6.3 billion from banks and building societies in November, following net repayments of £1.2 billion in October.
Large firms accounted for the bulk of the increase, borrowing £6.0 billion, while small and medium-sized enterprises recorded net borrowing of £200 million.
The annual growth rate of borrowing by large businesses rose to 7.2%, while SME borrowing growth increased to 1.9%, its highest level since July 2021.
Interest rates on new corporate loans eased, with the average rate on new lending to private non-financial corporations falling to 5.6%, while rates on new SME loans declined to 6.2%.
Overall, sterling net lending to households and private sector companies — measured by M4Lex — rose to £15.5 billion in November from £13.3 billion in October, underscoring a broad-based pickup in credit activity.