June mortgage borrowing smashed previous record to hit new high
Mortgage borrowing rocketed to a new record high of £17.9 billion in June, said the Bank of England.
This smashed the previous record of £11.5bn, set just three months ago in March 2021.
Borrowing has now averaged £5.4 billion a month in the 12 months to May 2021, as the housing market boom has defied the pandemic and wider economic woes.
Last month’s increase was driven by homebuyers borrowing ahead of the Stamp Duty deadline.
In terms of numbers, approvals for house purchases actually decreased in June to 81,300, from 86,900 in May.
This comes as no surprise, as so many buyers had brought forward their purchases for the Stamp Duty holiday. It was the lowest number of approvals since July 2020, but still above pre-February 2020 levels.
Remortgage approvals rose slightly to 35,400 in June, from 34,800 in May.
Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “This record borrowing has totally eclipsed the previous high set only three months earlier, and was the result of a perfect combination of pent-up demand, the race for more space and the stamp duty holiday.
“June’s financing levels were substantially higher than in March, the original stamp duty deadline, indicating that the scheme’s extension gave many buyers the breathing space they needed to complete their house move in time to achieve the savings.
“Stamp duty savings have started to taper off and approvals have dipped slightly. We could see yet another rush of sales ahead of the end of the stamp duty savings coming to an end in September, but home finance is unlikely to get close to what we saw in June.”