Real Estate Top Stories
Mortgage Lending_GBO_Image

Stamp duty uncertainty: mortgage lending slumps

Net mortgage lending by the British lenders slumped to €3.3 bn in April from €11.5 bn in March

UK’s mortgage lending has slumped in April as the government’s decision to prolong the tax break on property sales was announced late, according to the data released by the Bank of England (BoE). The delay in the government’s announcement failed to influence the buyer in April, but the housing market activities look on course to rebound. Net mortgage lending by the British lenders slumped to €3.3 billion in April from €11.5 billion in March.

BoE stated that the recent variability is likely to reflect the reduction in the stamp duty tax. The tax was initially expected to end in March but later was extended to the end of June. Rishi Sunak, Chancellor of the Exchequer, announced that he would be extending the tax break in his March 3 budget. By then, many buyers were already rushing through the process of transactions to complete them before the previous deadline.

The cut in stamp duty land tax began in July 2020 to increase the housing transactions after a slump during the start of the Covid-19 pandemic. Prices of houses increased since then despite the economic damage. The prices in May were at 10.9 percent a year ago, according to Nationwide.

Another major factor contributing to the surge in prices is the greater demands for spacious housing outside city centres from people working from home. The mortgage approvals adjusted faster than lending to the tax charge. It rose from 83,402 in March to 86,921 in April. Yet, they are below November’s high of more than 103,000. The households were still paying down their personal debt that primarily reflected a reduced spending opportunity during the lockdown.

Related posts

Amazon’s Astro raises questions about device privacy

GBO Correspondent

Nigeria turns towards technology to keep crude oil thieves under check

GBO Correspondent

Insurance companies in Hong Kong rely on online sales to avoid record slump

GBO Correspondent