Net borrowing of mortgage debt by individuals decreased sharply by £13.7 billion to -£0.8 billion in April. This followed the sharp increase in net borrowing by £9.6 billion in March as buyers rushed to get their purchases through before the change in stamp duty.
Alice Haine, personal finance analyst at Bestinvest, the online investment platform, said:“UK mortgage approvals – an indicator of future borrowing – fell in April for the fourth consecutive month and net mortgage borrowing plunged as the short-term surge in buyers racing to get deals completed before stamp duty threshold changes took effect, dropped off.
“April was too late to secure a mortgage and complete a residential property purchase before the thresholds reverted to the previous lower level, so any buyers pushing ahead with a purchase that month would have already accepted the higher costs.
“While higher stamp duty costs pose a challenge for buyers, particularly first-timers who need to factor in a bigger property tax bill upfront, the housing market remains resilient with prices rising 0.5% in May on the month, according to the latest Nationwide House Price Index. Mortgage rates are also easing, thanks to four interest rate cuts from the Bank of England since August last year. This is evident in the effective rate on newly drawn mortgages, which fell slightly to 4.49% in April.”
