UK Mortgage Market Remains Strong

FEB MORTGAGE APPROVALS 87,669 VS JAN 97,350

FEB NET CONSUMER CREDIT -GBP1.246BN VS JAN -GBP2.651BN

FEB NET CHANGE SECURED LENDING GBP6.171BN VS JAN GBP5.283BN

The UK mortgage market remained strong in Feb with mortgage borrowing registering at GBP 6.2bn, which is the highest level since Mar 2016 and was boosted by the expected end of the stamp duty tax relief. Mortgage approvals stood at 87,669 in Feb, easing compared to Jan, but they remained above the level seen in Feb 2020. Approvals for remortgages ticked up to 34,300 in Feb. The effective rate on new mortgages rose to 1.91% in Feb, up from 1.85% seen in Jan. Households continued to make net repayments of consumer credit, recording GBP 1.246bn in Feb, which is slightly lower than at the start of the pandemic when net repayments registered at GBP 1.8bn in Mar 2020. As a result, the annual growth rate of consumer credit dropped further to -9.9%, again marking a new series low (began in 1994). The effective interest rate on new consumer credit ticked down to 5.16% in Feb, while the cost of credit card borrowing rose to 18.18%, its highest since May 2020.