British mortgage lending logged its biggest increase on record in March largely driven by the extension of stamp tax duty holiday, the Bank of England said Tuesday.
The lending secured on dwellings increased by GBP 11.8 billion in March, which was the strongest since the series began in April 1993. Economists had forecast and increase of GBP 5.8 billion following a GBP 6.4 billion rise in February.
The number of mortgage approvals fell to 82,735 in March from 87,385 in February. Economists had forecast approvals to rise to 92,300.
The BoE said the strong borrowing was driven by the expected ending of the temporary stamp duty tax relief at the end of March, which has now been extended to the end of June.
Data showed that individuals made significant net repayments of consumer credit since March 2020. A further net repayment of GBP 0.5 billion in March this year was, however, a little smaller than seen on average each month over the past year.
Smaller firms borrowed an additional GBP 0.71 billion in March, while large businesses repaid GBP 1.4 billion.
These figures provide another reason to think that consumer spending was starting to gather some momentum in March, Ruth Gregory, an economist at Capital Economics, said.
And with consumers in position to power the recovery, this should mark the start of a rapid recovery that will push GDP back to its pre-crisis level in early 2022, the economist added.
Data revealed that M4 money supply increased 0.6 percent on month in March, taking the annual growth to 8.9 percent.