The British Bankers’ Association (BBA) published yet another industry report proving that mortgage lending sky-rocketed as investors tried to beat the stamp duty rush.
The reports saying that March saw a drastic increase in mortgage lending are plenty, and now the BBA has published yet another to highlight the same phenomenon again.
According to their recent report, banks and building societies gave out £17.1bn to people taking out mortgages in March, an increase of 64% from the same month one year earlier.
Looking at the bigger picture, March 2016 turned out to be the month with the highest amount borrowed since April 2008. The BBA report follows a series of other surveys which all said that lenders reported a spike in demand for secured borrowing in March.
On an individual basis, the number of mortgages issued was up 20% on the year before, with remortgage approvals even climbing up to 25%. On average, the amount borrowed for house purchases increased from £178,500 in February to £184,400 in March.
Other types of lending also saw an upward trend in March. Unsecured borrowing on credit cards and overdrafts is increasing at a yearly rate of 5.8%, as stated by the BBA, faster than the growth of wages or disposable incomes, whilst the deposit base is increasing at a steady 4.7% a year at the same time.
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.”
