Net consumer credit borrowing by individuals in the UK declined to £1.36 billion in February 2025, down from a revised £1.70 billion in January.
UK consumer credit growth slows in February
This decrease was primarily driven by a reduction in net credit card borrowing, which fell to £0.8 billion from £1.1 billion in the previous month. Meanwhile, net borrowing through other consumer credit channels, including car dealership finance and personal loans, remained steady at £0.6 billion. Despite the decline in overall borrowing, the annual growth rate for total consumer credit held steady at 6.4% in February. The annual growth rate for credit card borrowing edged up to 8.9% from 8.5% in January, while the growth rate for other consumer credit slowed to 5.2% from 5.5% over the same period.
Mortgage lending declines
Net mortgage debt borrowing by individuals in the UK fell by £0.9 billion to £3.3 billion in February 2025, following a £0.8 billion rise in January. Despite this, the annual growth rate for net mortgage lending remained largely unchanged at 1.9%. Gross mortgage lending, however, rose to £24.3 billion in February, up from £21.7 billion in January, marking its highest level since November 2022 (£24.9 billion). At the same time, gross repayments also saw a sharp increase, reaching £19.8 billion from £16.3 billion in the previous month.
Mortgage approvals drop more than expected
Net mortgage approvals for house purchases in the UK—a key indicator of future borrowing—declined by 600 to 65,500 in February 2025, falling short of market forecasts of 66,000. This followed a 400-approval decrease in January. Meanwhile, approvals for remortgaging (limited to cases involving a switch to a different lender) dropped by 800 to 32,000, following a rise of 2,100 in January. The ‘effective’ interest rate—representing the actual rate paid—on newly drawn mortgages edged up by 2 basis points to 4.53% in February. Similarly, the rate on outstanding mortgage balances rose to 3.87%, up from 3.81% in January.
