March mortgage lending hits new all-time high
Mortgage approvals of 82,700 were 13 per cent up on the previous month but lower than the recent peak of 103,100 recorded in November.
Strong new lending volumes also drove net mortgage borrowing, the difference between what is lent out and what was paid back, to a new high of £11.8bn.
The bank began its Money and Credit report in 1993 and March’s gross and net lending figures marked the peak of the series.
The record lending figures were achieved even before the launch of the new 95% mortgage guarantee scheme, aimed at encouraging lenders to offer more products to borrowers with only a 5% deposit.
Will borrowing tail off?
Strong borrowing, said the bank, was driven by the expected cut off to the stamp duty holiday at the end of March which was then extended to the 30 June.
Jonathan Sealey, chief executive at specialist lender Hope Capital, said: “Everybody expected the stamp duty holiday to drive activity especially as the deadline loomed closer, but to reach the highest level of borrowing in almost 30 years is exceptional.”
Don’t expect a cliff edge
Data from Hometrack showed that £150bn of property transactions were completed in the first 15 weeks of the year, running ten weeks ahead of a typical year.
“This level of sales wouldn’t normally be achieved until the end of June,” said David Ross, managing director, Hometrack. “At the same time, one in every 50 homes was sold between 1 January and 15 April, up from one in every 100 homes during the same period last year.
Furthermore, mortgage applications are expected to continue to rise until the end of June.
Ross added: “Lenders are anticipating a peak in mortgage market activity until this time, before tapering off in line with the traditional seasonal slowdown from July onwards and the arrival of the summer holidays. However, the emphasis is on ‘tapering’; we have no reason to expect a market cliff edge.”