Buy-to-let investors borrow ahead of stamp duty rise.
MORTGAGE borrowing jumped by one third year-on-year in February as buy-to-let investors snapped up homes ahead of a stamp duty increase, banks have reported.
At PS13.2 billion in February, gross mortgage borrowing remained "buoyant" and was 33 per cent higher than a year earlier, the British Bankers' Association (BBA) said.
Some 79,428 mortgages with a collective value of PS8.5 billion were approved for house purchase in February, marking a 20 per cent increase compared with February 2015.
The BBA said: "Reports suggest this is, in part, due to buy-to-let and second home buyers seeking to complete purchases ahead of the stamp duty increase in April."
From April 1, people buying a second home, such as a buy-to-let investment or a holiday home, will pay three percentage points above current stamp duty rates.
There will be a period of breathing space for people who temporarily end up with two homes due to difficult circumstances, for example people looking to downsize but having trouble selling their previous home.
The BBA also said that over the past year, net borrowing through personal loans has been rising at an annual rate of more than five per cent.
It said increased demand for personal loans reflects better credit availability, low interest rates and stronger household finances.
Credit card use is also on the rise, with 215 million purchases in February with a total value of PS12.1 billion among all credit card issuers, marking a 15 per cent increase compared with February 2015.
Meanwhile, net borrowing by non-financial businesses increased by PS852 million in February. The wholesale and retail trade increased their borrowing, as did the real estate sector, while a decrease was seen in the transport, storage and communication sector, the BBA said.
Richard Woolhouse, chief economist at the BBA, said: "Mortgage borrowing remained buoyant in February. It appears that borrowers are continuing to try to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect next month.
"Consumer confidence is also robust. Households are increasingly taking advantage of low interest rates by taking on more unsecured borrowing."
|Printer friendly Cite/link Email Feedback|
|Publication:||Liverpool Echo (Liverpool, England)|
|Date:||Mar 26, 2016|
|Previous Article:||Most DIY projects take two years to complete.|
|Next Article:||House price average has 'passed PS300,000 mark' Research published by property marketing portal Rightmove suggests that the average price of a home...|