Economy

Record jump for UK mortgage lending after tax break extended

First £500,000 in England or NI will remain exempt from stamp duty until end June

Chancellor of the UK exchequer Rishi Sunak attempts bricklaying with Danny Honeyman at a construction area during a local election campaign visit to Northern School of Art last week in Hartlepool, England. Photograph: Lee Smith - WPA Pool/Getty Images

Tue May 4 2021 - 14:21

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

Mortgage borrowing rose by a net £11.8 billion (€13.64 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.

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

The first £500,000 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 tax-free allowance until the end of September.

Mortgage lender Nationwide said last week that British house prices jumped by 2.1 per cent 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 per cent lower than in March 2020. Britain’s first coronavirus lockdown began in late March 2020.

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

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