Housebuyers borrow record £18bn in stamp duty deadline scramble

MORTGAGE lending smashed previous records last month as homebuyers rushed to beat the deadline for the stamp duty holiday.

Net borrowing jumped by £17.9bn in June, according to the Bank of England, by far the biggest figure ever and more than 50pc higher than the previous peak of £11.5bn in March. The surge in lending came as Rishi Sunak rolled back a stamp tax break, drastically reducing the savings available on properties worth over £500,000.

Although July’s number is expected to be much lower, the sheer scale of lending in June took economists by surprise and sparked speculation that demand for homes will prevent a slump in prices after they surged to alltime highs.

Lloyds, Britain’s biggest mortgage lender, said that June was its busiest month for completions since 2008. It now expects house prices to rise by 5.6pc this year, compared to previous predictions of a 0.1pc annual fall.

Gareth Lewis, of property lender MT Finance, said the end of the stamp duty holiday has coincided with a traditional seasonal drop-off in transactions.

He said: “While this deadline focused buyers’ minds, consumer confidence has remained relatively high since then.

“Buyers have continued to proceed with their transactions where they missed the deadline, aware they can still take advantage of some stamp duty savings before the end of September.”

The biggest peak of the post-credit crunch era – before this year – was in March 2016, when landlords raced to complete transactions before a 3pc stamp duty surcharge was introduced on second homes. A record £7.2bn was borrowed, a number dwarfed by comparison with the latest boom.

Andrew Wishart, of Capital Economics, predicts that there will be a sales slowdown in expensive areas now the stamp duty cut has been partially reversed. He said: “With temporary support to the top end of the market from the stamp duty holiday now withdrawn, the underperformance of London may become more pronounced.”

Buyers will be able to save a maximum of £2,500 until September, when the holiday ends altogether.