March mortgage lending hit record highs
New mortgage borrowing was £11.8 billion in March, according to the Bank of England, the highest since it launched its measure in 1993.
It added that gross mortgage lending also reached a new high in March at £35.6 billion.
The surge in borrowing was driven by the expected ending of the stamp duty holiday at the end of March, which has now been extended to the end of June.
Mortgage numbers up
The number of mortgage approvals for house purchase were 82,700 in March, up from 73,000 in February 2020.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The boom in mortgages is partly explained by buyers rushing for the old stamp duty deadline. In the end, the deadline was shifted to June, but buyers were already committed and keen to get the whole thing over and done with as soon as possible.
“We know from subsequent months’ data that renewed optimism among buyers means the boom in house-hunting has continued. And because it hasn’t been accompanied by the same enthusiasm for house-selling, prices are on the march again.”
Martin Stewart, director of London Money, added: “While the market remains very active, we are already starting to see the implications of the June Stamp Duty cliff edge. Yes, mortgages are being agreed in huge numbers but that doesn’t necessarily equate to completed sales. We are already seeing solicitors refusing to take work on where the buyer is expecting them to complete in time.
“It’s impossible to predict what will happen during the rest of the year in terms of demand for property. While we are hopeful that some normality will return to large parts of our lives, the issue of cheap money chasing too few assets still remains.”