Latest Bank of England data has shown that net borrowing of mortgage debt by individuals increased to £4.8 billion in February, from £4.2 billion in January.

The rise in February is also above the previous six-month average of £4.5 billion. The data also shows that net mortgage approvals for house purchases increased to 62,600 in February, from 60,200 in January, below an average of around 63,500 over the previous six months. Remortgaging approvals increased to 41,200 in February from 38,500 in January.

Consumer credit borrowing by individuals slightly increased to £1.9 billion in February, from £1.8 billion in January. It was also slightly above the previous six-month average of £1.8 billion.

Within this, net borrowing through credit cards was £0.8 billion in February, down from £0.9 billion in January. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to £1.2 billion in February, up from £0.9 billion in January.

John Phillips, CEO of Just Mortgages and Spicerhaart, said “Today’s figures paint a nuanced picture. On the one hand, a rise in net borrowing to £4.8bn points to buyers continue to push on with transactions. On the other hand, approvals, while up on the month, remain below trend, showing a level of hesitation that hasn’t fully disappeared.

“These figures reflect a market that’s active, but more selective. Demand hasn’t gone away; it’s become more deliberate. Those who need to move are getting on with it, while others are taking longer to commit as they weigh up affordability and timing.

“For brokers, this is exactly where advice matters most. The market is neither fully accelerating nor stalling, helping clients navigate complexity and act with controlled confidence is what will keep transactions flowing.”

The Bank of England figures also show that lending to SMEs increased. Small and medium-sized non-financial businesses (SMEs) borrowed, on net, £0.4 billion in February, following net borrowing of £0.3 billion in January. The annual growth rate of borrowing by SMEs increased to 2.8% from 2.4% over the same period.

Ravi Sidhu, Subject Matter Expert – Credit Risk, Dun & Bradstreet, said “February’s rise in SME business lending suggests parts of the market were becoming more willing to invest and refinance, even with borrowing costs still elevated. This points to a degree of adjustment with firms adapting to operate through a higher- interest rate environment, rather than putting their plans on hold.

“However, these figures reflect decisions made before the recent escalation in global tensions. While the data indicates resilience, the spike in uncertainty through March could still weigh on appetite for new borrowing. This may prompt businesses to reassess their supply chains and return to a more cautious, liquidity-first approach.

“In this environment, having clear, timely data on credit risk and exposure is critical. Firms with financial headroom and stronger visibility across their cash flows and value chains will be better placed to absorb sudden shocks, stay disciplined, and retain flexibility without missing growth opportunities.”

Source: Credit Connect