Net mortgage borrowing across the UK mortgage market fell to £3.3bn in April, down from a record £11.5bn in March, according to new figures published by the Bank of England (BoE).

This figure was also lower than the £5.7bn monthly average borrowed in the six months to February 2021.

Despite weaker net lending, the BoE reported that both gross lending and repayments remain above levels seen since the start of 2020, and suggested the recent variability is likely to reflect the impact of the stamp duty holiday, which is set to continue for the rest of June before tapering down from July.

The figures also showed that approvals for house purchase ticked up in April, to 86,900, climbing from 83,400 in March. The BoE stated that they have fallen from a recent peak of 103,400 in November but have remained relatively strong. By contrast in February last year, there were 73,400 approvals for house purchase.

Approvals for remortgage, which only capture remortgaging with a different lender, remained broadly unchanged at 33,100.

Commenting on the data, Hope Capital CEO, Jonathan Sealey, said: “As soon as the Chancellor announced the extension of the stamp duty holiday deadline to the end of June, as an industry we were anticipating a rollercoaster pattern to emerge for 2021. And so this fall is likely to be followed by a steady rise hitting a second peak at the end of this month.”

Just Mortgages and Spicerhaart national operations director, John Phillips, added: “While net mortgage borrowing fell dramatically in April, the number of mortgage approvals has remained impressively high. We are not at the same record-breaking levels as the height of the housing rush, but lending remains remarkably strong and this looks set to continue.

“The stamp duty holiday has certainly inspired action from some, however a key driving force has been the significant increase in savings through the pandemic.

“Households are saving slightly less than at the peak of the pandemic – potentially as hospitality has begun to open back up – but there are still plenty of buyers that still have significant sums to spend on a property.”

The BoE also reported that individual borrowers have made significant net repayments of consumer credit since March last year. The latest figures, however, showed that the further net repayment of £0.4bn in April this year was less than seen on average each month over the previous year (£1.7bn). As a result, the data showed the annual growth rate – while remaining weak at -5.7% in April – increased from -8.8% in March.

Within consumer credit, the repayment in April was concentrated in credit cards (£0.4bn). The BoE stated that there was no additional borrowing in other forms of consumer credit, while the annual growth rates of both components have risen from series lows in February, but remained weak at -12.9% and -2.7%, respectively.

Bluestone Mortgages managing director, Steve Seal, highlighted that the government’s roadmap out of lockdown saw the reopening of outdoor hospitality and non-essential retail in April.

“As people returned to work in these sectors, many households began receiving a regular source of income again, in some cases for the first time since before Christmas,” Seal commented.

“That said, there is still a long way to go before normality resumes and for thousands of people, the pandemic will have left its mark on their finances – even those who have been able to return to work in recent weeks.

“Without a doubt, this shift has left more individuals in need of specialist lending, so it’s important that the market is able to meet this rise in demand. Specialist lenders need to prepare themselves for a post-coronavirus future in which many borrowers could find themselves locked out of mainstream lending.”

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