Net mortgage approvals for house purchases fell by 600 to 65,500 in February, following a decrease of 400 in January, said the Bank of England.
Approvals for remortgaging also fell, by 800 to 32,000. This came after a rise of 2,100 in January.
Net mortgage borrowing fell by £0.9 billion, to £3.3 billion in February, following an increase in of £0.8 billion in January.
Thomas Lambert, financial planner at Quilter, said: “The changes to stamp duty, which come into effect from tomorrow and will land homebuyers with hefty tax bills, have had a significant dampening effect on the property market. Net mortgage borrowing decreased by £0.9 billion to £3.3 billion in February, likely due to people putting home moves on hold as they’d missed the opportunity to get a sale across the line in time. Approvals for house purchases stayed flat, decreasing by just 600 to 65,500 in February.
“While we had seen a slight flurry of activity in the preceding months given people would still have had time to beat the stamp duty changes, many of those who left it too late to get a purchase completed will have put their plans on hold.”
Your Mortgage Awards 2024/25: winners revealed
Sponsored by Your Mortgage Awards
Alice Haine, personal finance analyst at Bestinvest added: “The February decline in mortgage approvals may reflect buyers being realistic about their prospect of taking advantage of the stamp duty reliefs before they expire.
“Buying a home will become more expensive from tomorrow when the temporary stamp duty relief first introduced by the Conservative Government in 2022 comes to an end and the thresholds at which people start paying this property purchase tax revert to the previous, lower levels.
“This will deliver a particularly heavy hit to first-time buyers who must not only raise enough money for a deposit but also enough to cover the higher tax bill.”
