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29 Mar 2021 | 07:28

Mortgage approvals fall more than expected in February

(Sharecast News) - UK mortgage approvals fell more than expected in February ahead of the original stamp duty holiday deadline, according to figures released on Monday by the Bank of England. Mortgage approvals declined to 87,669 from 97,350 in January, versus expectations of a smaller drop to 95,000. Mortgage approvals were higher than in February 2020, but have fallen from a peak 103,700 in November 2020, the BoE said. Nevertheless, approvals were still well above the monthly average in the six months to February 2020 of 67,300.

Net mortgage borrowing, meanwhile, was £6.2bn in February - the highest level since March 2016.

The stamp duty holiday had been due to end on 31 March but in his budget in early March, Chancellor Rishi Sunak extended it to the end of June.

Andrew Wishart, property economist at Capital Economics, said that while mortgage approvals for house purchases did start to cool in February, "the extension of the stamp duty holiday and the renewed strength of the survey data suggest that lending will remain high for most of this year".

"Mortgage approvals for house purchase are likely to reach their highest level since 2007 this year," he added.

Other data from the Bank showed that consumer lending fell in February at the fastest yearly pace on record. Consumer borrowing declined by 9.9% on the year, marking the biggest fall since the series began in 1994.

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