The number of mortgages removed by home buyers fell in February while the hurry to beat the deadline of the stamp rights decreased.
Data from the Bank of England showed that the total mortgage inspections fell by 600 to 65,000 after a decrease of 400 in January.
In the meantime, the number of remortgages also fell by 800 to 32,000 after an increase of 2,100 in January.
According to Alice Haine, personal finance analyst at Bestinvest by Evelyn PartnersThis data is important because it is an indicator for future loans.
She added: “The decrease in mortgage approvals can reflect the downbeat mood at the start of the year when consumers evaluated the impact on the economy and their personal finances, by Chancellor Rachel Reeves ‘Punishing’ Maiden Budget last October.”
She added: “The fall from February in mortgage goods inspections can be a reflection of buyers who are realistic about their prospect to take advantage of the exemptions of the stamp duties before they fall.”
The Stamp Duty Deadline Is today (Monday, March 31). That is why the thresholds for the tax will fall from tomorrow, which means that fewer people will be exempt from exemption.
Haine added: “This produces a particularly heavy hit for first buyers who not only have to raise enough money for a down payment, but also enough to cover the higher tax assessment.”
February was also the month that the Bank of England reduced interest rates by 0.25% to 4.5%, so it can be surprising that fewer mortgages were removed.
Haine, however, at the same time laid the effective rate – or the actual rate paid by borrowers – at newly drawn mortgages by 0.02% to 4.53% in February. This may therefore have influenced the number of approvals.
Despite the dip in approvals, mortgage brokers said that the number of applications from buyers and borrowers has remained stable.
Andrew Montlake, director of KorecoSaid through the newspaper agency: “Given the constant economic uncertainty, it is a relatively busy start of 2025 on the mortgage front. First buyers were mainly active in their efforts to defeat the deadline of the stamp rights at the beginning of the year, since the savings were considerable for many.
“The question began to lose weight very lightly in February and March when the deadline of the stamp rights approached, but the borrowing activity in no way dropped from a cliff.
“Of Santander who adjusted his affordability rules last weekAs a result of which people can borrow more, more lenders will probably follow in their footsteps, and if this happens, we can have a busier year than expected.
“A rate reduction at the next Bank of England Monetary Policy Committee meeting in May would really ignore things, but inflation will have to play a ball. The national insurance increases that come in in April could prove to be the inflationary that can throw a key in the works of tariff reductions in the short term.”