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August 07.2025

2 Minutes Read

HSBC UK’s New Mortgage Lending Hits £2.6bn: Navigating Economic Challenges

HSBC branch exterior with illuminated sign, urban setting.

HSBC's Mortgage Lending Growth Amid Market Challenges

HSBC UK has revealed that its new mortgage lending increased by a noteworthy £2.6 billion during the first half of the year. This growth, however, is not without challenges as the bank faces competitive pricing pressures in the mortgage market. As part of a strategic effort to bolster its market share, HSBC reported a 3% growth in loans and advances since December, attributed to both mortgage and commercial lending.

Understanding the Current Economic Climate

The economic backdrop is considerably complex, with the Bank of England recently cutting the base rate by 50 basis points to 4.25%. While this move aims to stimulate the economy, concerns regarding a weaker global environment could stifle UK growth and employment rates. Coupled with a persistent inflation rate of 3.6%, which exceeds the BoE's target of 2%, consumers are feeling a squeeze from high costs, making mortgage repayments increasingly burdensome.

The Impact of Rising Interest Rates on Borrowers

HSBC emphasizes awareness of how higher interest rates might dampen loan demand among consumers and businesses alike. With interest rates likely remaining elevated compared to pre-Covid-19 levels, borrowers face escalating monthly repayments. This scenario raises fundamental questions about the long-term stability of the housing market and the quality of credit as mortgage demand potentially diminishes.

Profit Results Amidst Declining Earnings

Despite HSBC UK’s mortgage activity, the bank reported a pre-tax profit of £3 billion, marking a 7% decrease from last year. Overall, HSBC’s global operations reflect a challenging environment, with a substantial 26% drop in first-half pre-tax profits, largely due to losses linked with Chinese banking exposures and Hong Kong real estate. HSBC’s group chief, Georges Elhedery, highlights a commitment to restructuring and enhancing organizational efficiency amidst these hurdles.

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HSBC UK’s New Mortgage Lending Hits £2.6bn: Navigating Economic Challenges

HSBC's Mortgage Lending Growth Amid Market Challenges

Understanding the Current Economic Climate

The Impact of Rising Interest Rates on Borrowers

Profit Results Amidst Declining Earnings

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