Insights 
VT 
In May, UK mortgage approvals reached 63.03k, exceeding the forecast of 59.75k. The Bank of England’s data also revised April’s approval figures from 60.46k to 60.66k.
Net consumer credit for May stood at £0.9 billion, with previous figures adjusted from £1.6 billion to £1.9 billion. Individuals’ net borrowing of mortgage debt surged by £2.8 billion to £2.1 billion. This followed a previous drop of £13.8 billion to -£0.8 billion in April.
Remortgaging Approval Increase
Remortgaging approvals also experienced an increase, rising by 6,200 to reach 41,500. This marked the largest increase since February 2024.
Taken together, these numbers tell a story of renewed movement in the lending markets. The jump in mortgage approvals in May, beating what economists had expected, suggests more households are stepping into home ownership or shifting properties. This is supported by the revised April figure, which shows borrowing activity didn’t ease quite as much as previously thought. It’s not just a one-off bump—momentum appears to be building.
Meanwhile, we noticed consumer credit fell sharply from the previous month. This could reflect a more cautious public, possibly pulling back on spending or repaying outstanding balances. It might also be tied to better debt management as households prepare for rate cuts or weigh up market noise about inflation stabilisation. It’s useful to watch if that £0.9 billion figure trends lower again through the summer or whether May was just an anomaly.
Mortgage borrowing itself saw a steep jump, climbing from a negative number in April all the way to £2.1 billion in May. That’s more than just a rebound. It suggests a pickup in confidence, perhaps due to expectations of a supportive monetary policy in the near term. This change—coming after such a deep contraction the month before—adds to our impression of a shift in market sentiment.
Shift In Market Sentiment
Remortgaging approvals rising by over six thousand points to reach the best level since late winter confirms what we suspected from other borrowing trends: there’s more activity, more positioning. When we consider how remortgaging demand tends to reflect rate expectations or attempts to lock in favourable terms, it gives a clear hint at how financial participants are assessing risk going forward.
From where we sit, we interpret this as an environment where household balance sheets are adjusting—partly reacting to current costs and partly anticipating changes in policy direction. The beat in expected approvals supports that. There’s rotation happening, and that’s where opportunity lies.
What matters most now is how quickly borrowing patterns stabilise or if certain sectors, like remortgaging, continue to accelerate. We are especially attentive to whether institutions reflect these changes in spread pricing or margin requirement shifts. Volatility around expected policy announcements may intensify positioning as refinancing activity increases.
Changes like these don’t float in isolation. They usually precede interest rate speculation or front-running, especially when movement in borrowing flips so sharply as it did between April and May. Our trading desks are observing how short-end instruments and longer-term swaps are responding. In our view, this shift in consumer and home loan activity hints at broader re-pricing potential in fixed income derivatives and rate-exposed products.
We actively track these datasets not just for what they imply today, but for how they could dovetail into near-term movements in the curve. Keeping close tabs on implied volatility and break-even spreads across maturities becomes more important as this behavioural trend strengthens. Where sensitivity increases, so does optionality demand.
