UK mortgage borrowing hit a record £17.9bn in June as homebuyers raced to complete purchases before the stamp duty holiday started to taper off, Bank of England figures showed.
The net figure was well ahead of the previous record of £11.5bn set in March. There was no large increase in the number of mortgage approvals in recent months, suggesting a shorter time between a lender approving a mortgage and completion.
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Approvals for house purchases fell in June to 81,300 from 86,900 a month earlier. June’s figure was the lowest since July 2020 when the housing market reopened and Chancellor Rishi Sunak announced a sharp, temporary cut in stamp duty for house purchases in England.
Sunak’s cut, which finishes completely at the end of September, helped fuel a frenzy in the housing market as buyers scrambled to capitalise on the reduction. However, the resulting increase in property prices meant most of the gain went to sellers. Households have also been moving house after rethinking their needs with working from home becoming the norm for many.
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The interest rate paid on newly drawn mortgages rose to 1.95% from 1.9% a month earlier and 1.72% in August 2020.
Consumer borrowing remained low as individuals took on £0.3bn of debt in June. Households repaid an average of £1.9bn a month from March 2020 to February 2021. Households deposited an extra £9.8bn with banks and building societies in June, down from an average of £14.7bn in the six months to May and a peak of £27.4bn that month.
By Sean Farrell
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