The property market was in full swing last month with yet another industry report showing mortgage lending shot up as investors piled in to beat the stamp duty surcharge which came into effect on 1 April.
According to the British Bankers’ Association (BBA), banks and building societies dished out £17.1bn to people taking out mortgages in March – up 64 per cent on the same month last year.
It was the highest amount borrowed for house purchases in a single month since April 2008 and follows a string of other surveys which said lenders reported a spike in demand for secured borrowing in March.
The number of individual mortgages issued was up one-fifth on last year, with remortgage approvals climbing by 25 per cent. The average amount borrowed for house purchases ticked up from £178,500 in February to £184,400 in March.
Other types of lending were also on the march in March. Unsecured borrowing on credit cards and overdrafts is growing at an annualised rate of around 5.8 per cent according to the BBA, faster than increases in wages or disposable incomes, while the deposit base is increasing at a steady 4.7 per cent a year.
Dr Rebecca Harding, chief economic adviser at the BBA, said:
A surge in buy to let and second home buying ahead of the new stamp duty surcharge in April led to a sharp rise in March’s gross mortgage borrowing as people brought transactions forward.
For households more widely, consumer credit continues to grow above real earnings growth, as improving consumer confidence and low interest rates combine to stimulate borrowing demand for personal loans, cards and overdrafts.