Brits borrowed billions in April as housing market boomed
Mortgage borrowing hit £3.3bn in April as house prices rose at their fastest rate in five years, a trend driven largely by the extension of the stamp duty holiday.
April’s mortgage borrowing was significantly lower than March’s £11.5bn figure, however, according to the latest figures from the Bank of England, despite mortgage approvals hitting 86,900, a slight increase on March.
Mortgage approvals hit a peak of 103,400 in November, according to the BoE, and while they have fallen since then, they have remained strong.
A year ago activity in the housing market collapsed in the wake of the first lockdown with transactions dipping to a record low of 42,000 in April 2020.
Since then there has been a complete turnaround in the housing market in the past year, buoyed by the extension of the stamp duty cut introduced last summer.
“I think what we’re seeing in the housing market at the moment is being driven mainly by the tax holiday,” the BoE’s deputy governor Jon Cunliffe told the BBC yesterday.
“There are some signs that people are making different housing choices and that may affect the future. It’s something we’re watching very carefully.”
The tax holiday was originally due to end in March before the government announced an extension to June.
The new record average house price is £243,000, up by almost £24,000 over the past twelve months, according to the latest data from Nationwide.