The Bank of England’s Money and Credit statistics point to a noticeable slowdown in mortgage activity, with net borrowing by individuals falling to £2.9 billion from £4.4 billion in April. KPMG UK also mentioned that mortgage approvals for house purchases declined to 56,200, down from 66,000 the previous month, while approvals for remortgaging dropped sharply to 33,300 from 51,200.
Consumer credit borrowing remained steady at £1.7 billion, and the net flow of broad money (M4ex) rose to £11.0 billion.
In its commentary on the release, professional services firm KPMG emphasized that the fall in mortgage and remortgage approvals reflects a clear dip in consumer confidence.
Global and UK Head of Financial Services Karim Haji noted that concerns about the UK economy, persistent inflation, and global instability appear to be keeping many potential buyers off the property ladder.
Haji observed that consumer credit levels stayed largely flat in May.
However, he suggested that unusually warm weather in June could drive increased borrowing as households ramp up summer spending.
Looking further ahead, he warned of mounting pressure on household finances, with inflation and energy bills expected to rise over the coming months.
This combination, he said, points to a summer squeeze for many families.
Political instability and ongoing global conflicts continue to cloud the economic outlook, adding another layer of uncertainty for borrowers and lenders. \
Haji called on financial institutions to step up support for customers facing affordability challenges.
He recommended practical measures such as hands-on budgeting help, clear financial guidance, and flexible repayment options to help people manage their commitments more effectively.
The data also showed annual growth in broad money (M4ex) edging up to 4.8 per cent, while the annual growth rate for lending to individuals and businesses (M4Lex) eased to 5.9 per cent.
Net mortgage borrowing remained below its recent six-month average, and gross mortgage lending slipped slightly to £27.1 billion.
KPMG’s analysis underscores a broader theme of caution among UK households.
While consumer credit has held steady and broad money flows have remained positive, the sharp decline in housing market approvals signals that higher borrowing costs and economic uncertainty are weighing on big-ticket decisions.
The firm’s commentary suggests that lenders will need to play a proactive role in supporting customers through what could be a challenging period ahead.
The latest figures and KPMG’s reaction paint a picture of a resilient but increasingly cautious consumer sector.
Mortgage activity is cooling, consumer borrowing is stable rather than accelerating, and external pressures on household budgets are building.
As the summer progresses in 2026, the interplay between weather-driven spending, rising costs, and geopolitical tensions will likely shape the next set of monthly data. Financial services firms and policymakers will most likely be monitoring the environment closely to see how these trends evolve.