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Net mortgage borrowing hit £9.5bn in September, a significant jump from the £4.4bn seen in August, according to new Bank or England (BoE) data.

This increase, says the BoE, “was driven by borrowing ahead of the complete tapering of lower stamp duty from October.”

It is the highest number seen since June 2021’s record of £17.1bn, the bank adds.

Alongside this, gross mortgage lending “increased sharply”, from £20.9bn to £30.7bn.

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Approvals for house purchases, meanwhile, fell on a monthly basis, from 74,200 to 72,600 while the value of this metric ticked downwards from £15.5bn to £15.3bn.

And approvals for remortgages increased slightly, from 40,000 to 41,500, with the value rising from £8bn to £8.4bn.

North London estate agency and former Rics residential chairman Jeremy Leafe says: “[These] numbers come at a particularly interesting time when the high borrowings showed buyers and sellers rushing to take advantage of the stamp duty holiday, whereas still relatively high approvals demonstrate a confidence to move even without the support of the concession.

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“Worries about inflation and mortgage rates, which are even higher since the Budget, do not seem to be reducing activity while demand particularly for family houses continues to comfortably outpace supply.”

And Mark Harris comments: “This is likely to be the last set of numbers from the BoE where the effective interest rate on new mortgages falls as several lenders, including Barclays, HSBC, NatWest and TSB, have all since raised their pricing in anticipation of a base rate rise next week.

“With the BoE hinting at a rate rise, and the Chancellor in his Budget referring to an average rate of inflation of 4% next year, all signs are that the official rate will rise for the first time since March 2020.

“Whether base rate rises or not, mortgage rates have started edging upwards as the markets have already priced in a rate rise, and possibly two or three more by the end of next year.”

By Gary Adams

Source: Mortgage Finance Gazette

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