The number of mortgage approvals made to home buyers fell for the third month in a row in March, in signs of a slowdown as stamp duty changes loomed.
The Bank of England said about 64,300 mortgages for house purchases got the green light for in March. Approvals are an indicator of borrowing taking place in the future.
From April 1, stamp duty discounts have become less generous for some home buyers. Stamp duty applies in England and Northern Ireland.
Figures released by HM Revenue and Customs (HMRC) on Wednesday showed that house sales more than doubled in March compared with the same month a year earlier, as buyers rushed to beat the stamp duty deadline.
House sales often bunch up around stamp duty cliff edges.
Across the UK, an estimated 177,370 sales took place in March – a 104% increase compared with the 86,810 sales recorded in March 2024 – according to the HMRC figures.
The Bank of England’s Money and Credit report also showed that approvals for remortgaging (which only capture remortgaging with a different lender) ticked up in March, to reach 33,400.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, an online investment platform, said: “The data reflects the market returning to a new normal as most buyers would have realised March was too late to secure a mortgage and complete the deal before the (stamp duty) thresholds reverted to the previous lower level.
“Uncertainty in the wider economy may have also played a part in dampening mortgage market activity in March.”
Jason Tebb, president of OnTheMarket, said: “Further reductions from the Bank of England, perhaps even next week, would provide a welcome shot in the arm for the market, particularly now that the stamp duty concession has ended.”
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Karim Haji, global and UK head of financial services at KPMG, said: “Another dip in mortgage approvals underscores the affordability challenges many are facing, particularly against lower-than-expected headline inflation, an unchanged base rate and incentives to rush through mortgage deals ahead of April’s stamp duty increase.
“With such an uncertain economic outlook, lenders will need to be alive to the financial struggles of their customers and be ready to step in to support them both now and in the months ahead.”
Looking at households’ non-mortgage borrowing, the annual growth rate for consumer credit slowed to 6.1% in March, from 6.4% in February.
Within the consumer credit total, the annual growth rate for credit card borrowing cooled over the same period to 8.4%, from 8.9%.
John Dentry, product owner at the Current Account Switch Service (Cass) said: “A decline in consumer credit borrowing may reflect a growing sense of caution among individuals.
“However, while credit figures remain high, along with inflation and interest rates, it’s critical consumers understand the implications of borrowing, the costs associated with credit, and the importance of budgeting.”
Households’ deposits with banks and building societies increased by £7.4 billion in March, following net deposits of £5.0 billion in March. Within the latest figure, households deposited an additional £4.2 billion into Isas as the tax year neared an end.
Laura Suter, director of personal finance at AJ Bell, said: “If you want one figure to sum up the apathy of the UK’s savers, it’s the fact that £280 billion is sitting in accounts earning absolutely no interest, at a time when interest rates are north of 5% for some savings accounts.
“The latest Bank of England data to the end of March shows that there is a mountain of cash paying no interest, which has ballooned in recent years despite the Bank of England’s base rate rising and savings rates remaining decent. The pile of cash getting no return has grown in the past year, by £51 billion.
“The nation is missing out on millions of pounds of potential returns on their money.”
In March, UK non-financial businesses borrowed £1.8 billion of net loans from banks and building societies, including overdrafts.
The annual growth rate of borrowing by big businesses increased to 5.3% in March, from 4.8% in February.
The annual growth rate of borrowing by SMEs (small and medium-sized enterprises) was minus 1.2%, up from minus 1.5% previously.