Mortgage loans hit record high of £ 11.8bn in a month as housing market fueled by stamp duty and low mortgage rates
- Figures show that net mortgage loans are the highest since the records began
- Homeowners say homeowners benefit from low mortgage rates
- Due to the break in stamp duty, borrowing throughout the UK is also on the rise
Net mortgage loans hit a record high of £ 11.8 billion in March – the highest since the records began.
Data released by the Bank of England shows that borrowing peaked in the same month when one in six homes sold for more than the asking price.
Experts have said it shows homeowners are taking advantage of low mortgage rates to improve their properties.
The high amount of credit comes from a total of 82,700 mortgage approvals issued to home buyers in March.
Mortgage loans are now the highest since the records began 28 years ago (Shutterstock)
The number of mortgage approvals is lower than the recent peak of 103,100 in November 2020, indicating that amounts borrowed are soaring.
One in six homes sold above asking price last month – the highest rate in seven years as the housing market shows no signs of cooling
According to real estate agents, one in six homes was bought in March for more money than the amounts initially charged by sellers.
It represented the highest percentage of homes sold above asking price in about seven years.
The number of agreed sales was also the highest for March since 2007, NAEA (National Association of Estate Agents) Propertymark said.
An average of 12 sales were agreed per brokerage – the highest figure for March since 2007, when that was also 12.
More than a quarter (27%) of sales in March went to start-ups – the highest figure since June 2020.
For non-mortgage loans, households also continued to pay back more than they had borrowed in March.
A net consumer credit repayment of £ 535 million was recorded, including credit card borrowing, personal loans and overdrafts.
The stamp duty holiday was due to expire in March, but was extended, which is also considered a contributing factor.
And in April, a series of lenders launched 5% deposit mortgages as part of a government-backed plan.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The strength of the runaway housing market is reflected in the mortgage data, with a strong loan level in March.
With homeowners borrowing an additional £ 11.8 billion, bringing the net loan rate up to its highest level since the series’ inception in 1993, those not relocating are taking the opportunity to improve, with cheap mortgage rates taking them. help you make this decision.
Since the stamp duty holiday was originally supposed to end in March, this focused the minds of the borrowers and helps explain the boom in lending.
“With this extended, we expect activity to remain buoyant in the coming months, especially as mortgage rates are likely to remain low and the availability of high loan-to-value deals will increase.”
Another expert speculated that lenders are giving more in anticipation of an expected slowdown.
The number of mortgage approvals is lower than the recent peak of 103,100 in November 2020, indicating that the amounts borrowed are soaring (shutterstock)
Simon Gammon, managing partner at Knight Frank Finance, said: “The real estate market is red hot as home seekers who are postponing relocations during the worst of the crisis are now buying over.
Clarifying economic sentiment alongside major changes in work and lifestyles and limited inventory availability is a powerful mix that is likely to boost activity and house prices well into the summer months.
‘We do expect that activity will start to slow down at that point. We are already seeing more homes coming onto the market that will restore the imbalance in supply and activity will naturally slow down as the majority of buyers delaying moves find new places to settle.
“The lenders know this and are seizing the opportunity to build market share by offering competitive rates and increasing product choice.”
The news comes after it was reported that one in six homes were sold for more than the asking price in March
Jeremy Leaf, a North London real estate agent and former living chair of the Royal Institution of Chartered Surveyors, said: “ Buyers are determined to relocate, even though many know the logjam in the system means they won’t be able to take advantage of the concession for stamp duty before phasing out starts at the end of June.
“Looking ahead, we don’t expect much to change, although prices are likely to soften rather than correct, as more people’s demands are met and the balance between supply and demand returns.”
Mortgage loan records began in April 1993, under the Money and Credit division of the Bank of England.