Net mortgage approvals for house purchases fell by 600 in February to a total 65,500, new figures released by the Bank of England (BoE) have shown.

This latest total, which the BoE uses as an indicator of future borrowing, followed a fall of 400 in January amid the backdrop of upcoming changes to stamp duty in April.

Approvals for remortgaging, which only capture remortgaging with a different lender, also saw a decrease in February, by 800 to 32,000, following an increase of 2,100 in January.

The BoE’s latest Money and Credit report revealed that net borrowing of mortgage debt by individuals fell by £900m to £3.3bn in February, following an increase in net borrowing of £800m in January. The figures also showed that the annual growth rate for net mortgage lending was little changed at 1.9% in February.

Gross lending climbed to £24.3bn in February, from £21.7bn in January, and was the highest since November 2022 when the figure reached £24.9bn. Gross repayments also increased in February, to £19.8bn from £16.3bn.

Financial planner at Quilter, Thomas Lambert, commented: “The latest Money and Credit statistics from the BoE show the changes to stamp duty, which come into effect from tomorrow and will land homebuyers with hefty tax bills, have had a significant dampening effect on the property market.

“While we had seen a slight flurry of activity in the preceding months given people would still have had time to beat the stamp duty changes, many of those who left it too late to get a purchase completed will have put their plans on hold. This will particularly be the case for first-time buyers as their hard saved deposit will need topping up to cover the new stamp duty costs which they may not have factored in previously.

“Remortgaging approvals also slowed, dropping by 800 to 32,000 in February. The BoE confirmed a hold on interest rates at its latest monetary policy meeting in March, so we could see an uplift in those looking to lock in deals now given the fears that rate cuts could be slow to materialise.”

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