Mortgage Lending Highest in Five Years

 

According to data collected by the Bank of England, gross mortgage lending in February was higher than any month in the last 5 years.

The gross mortgage lending for February reached £27.7 billion which is 19% higher than this time last year and 13% higher than the £24.5 billion figure for January.

Buyers sought not to miss out on the stamp duty holiday that was supposed to come to an end on 31 March, although this has now been extended as Chancellor Rishi Sunak announced in the yearly budget.

There was an 11% drop since January in the number of mortgage approvals for house purchases to 87,700, a figure which has gradually dropped month by month since its peak in November 2020 in which it hit 103,700.

However, this is said to be understandable as by February many believed they had missed the opportunity to capitalise on the stamp duty holiday.

Furthermore, the number of mortgage approvals is still remarkably higher than the 67,300 in February 2020.

In delivering the yearly budget, Chancellor Rishi Sunak explained that the stamp duty holiday on properties valued under £500,000 is being extended until June 30th. It will then drop to £250,000 from June 30th to the end of September and then return to its usual level of £125,000 from October onwards.

It will be interesting to see how these figures change over the coming months with the stamp duty holiday having been extended, especially with 95% LTV products having come back on the market.

References
Lending reaches five-year high in February: BoE | Mortgage Strategy
Mortgage lending spikes on stamp duty effect | News | Housing Today