"This tells the story of a market finding its feet after the end of the stamp duty holiday in September which led to October’s significant drop."
November’s increase follows low net lending figures in October after borrowing was brought forward to September to take advantage of stamp duty land tax relief, before it was completely phased out.
The net borrowing in November was however £2.9 billion below the 12-month average to June 2021, when the full stamp duty holiday was in effect. Gross lending increased to £22.1 billion in November, from £19.5 billion in October.
Approvals for house purchases held steady at 67,000 in November, the lowest since June 2020 (40,500) but close to the 12-month average up to February 2020 of 66,700.
Approvals for remortgaging with a different lender rose to 44,500 in November. This remains low compared to the 12-month average up to February 2020 of 49,500, but is the highest since February 2020 (52,500).
The effective interest rate on newly drawn mortgages fell to a new series low of 1.50%, whilst the rate on the outstanding stock of mortgages also fell to a new series low of 2.02%.
Kimberley Gates, head of corporate partnerships at Sirius Property Finance, commented: “The stamp duty holiday helped spur a huge flurry of homebuyer activity for much of 2021 and so a steady decline in mortgage approvals was always likely to materialise following the final September deadline.
"However, this decline should be viewed as a return to pre-pandemic normality rather than a sign of dwindling health and the market continues to defy expectation and exceed industry forecasts where topline performance is concerned.
"While this year is unlikely to bring the same frantic market conditions as the last, we don’t expect there to be a significant reduction in buyer demand and therefore any further notable decline in mortgage approval levels.”
Joshua Elash, director of MT Finance, added: "These are positive numbers for the property and mortgage sectors as we kick-off the new year, with the Bank of England reporting that mortgage debt for individuals increased to £3.7 billion in November. This tells the story of a market finding its feet after the end of the stamp duty holiday in September which led to October’s significant drop.
"Approvals for house purchases are also now close to the 12-month average up to February 2020. Approval for remortgaging remains low although we expect this to bounce significantly in the coming months as consumer concern over a rising base rate will persuade more borrowers to tie themselves into a fixed rate on a longer-term basis.
"December’s data is likely to be stronger yet, although it will be interesting to see how the now seasonal concerns over another lockdown may have dampened the momentum of the bounce back."