Record jump for UK mortgage lending after tax break extended

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Record jump for UK mortgage lending after tax break extended

British mortgage lending showed the biggest net increase on record in March after finance minister Rishi Sunak extended a tax cut for property purchas

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British mortgage lending showed the biggest net increase on record in March after finance minister Rishi Sunak extended a tax cut for property purchases, Bank of England data showed on Tuesday.

Mortgage borrowing rose by a net 11.8 billion pounds ($16.4 billion) in March, the biggest increase since the series began in April 1993, the BoE said.

British lenders approved 82,735 mortgages in March, down by about 5,000 from February and a recent peak of over 103,000 in November, the BoE data also showed.

A Reuters poll of economists had pointed to 92,300 approvals.

Britain’s housing market rebounded strongly after the first coronavirus lockdown in the spring of 2020 and Sunak announced on March 3 that he was extending the cut in stamp duty land tax for buyers.

The first 500,000 pounds of any property purchase in England or Northern Ireland will remain exempt from stamp duty until the end of June, and there will be a 250,000 pound tax-free allowance until the end of September.

Mortgage lender Nationwide said last week that British house prices jumped by 2.1% in April, their biggest monthly rise in more than 17 years.

The BoE data published on Tuesday showed unsecured lending to consumers was 8.6% lower than in March 2020. Britain’s first coronavirus lockdown began in late March 2020.

A net repayment of 0.5 billion pounds in March 2021 was smaller than the average repayment of 1.9 billion pounds over the past year, the BoE said.

($1 = 0.7205 pounds)

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