Wednesday, May 5, 2021

Mortgage borrowing hits all-time high in March: BoE

Net mortgage borrowing in March hit £11.8bn, Bank of England data details – the biggest number seen since the bank started tracking this data in April 1993.

This blows past the last record high, in October 2006, when an additional £10.4bn was borrowed against homes.

In the previous month recorded, February 2021, £6.4bn of additional borrowing was counted.

The BoE adds that gross lending reached a new high in March, too – £35.6bn in total.

The number of house purchase approvals came in at 82,700 in March, which is down on the 87,400 seen in February. The value of approvals for house purchases in March equated to £17.9bn versus £18.8bn in February.

Remortgage numbers ran closer to each other on a monthly basis – in March, there were 34,800 approved at a value of £6.7bn against 34,500 approved at a value of £6.6bn in February.

Further data shows that the interest rate paid on newly drawn mortgages rose by 4 basis points to 1.95% on a monthly basis. The lowest rate recorded by the bank is 1.72%, noted in August 2020.

Coreco managing director Andrew Montlake warns: “This mad March mortgage data highlights the frenzied rush of people to buy in the second half of last year and save thousands of pounds on stamp duty.

“But the celebrations surrounding the stamp duty holiday may soon ring hollow if the market cools off and people find their savings have been wiped out by the premium they have paid for property.

“When borrowing is as extreme as this, it never tends to end well.”

And London Money director Martin Stewart comments: “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.”

The post Mortgage borrowing hits all-time high in March: BoE appeared first on The Mortgage Bureau.

https://www.themortgagebureau.co.uk/first-time-buyer/mortgage-borrowing-hits-all-time-high-in-march-boe/

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