U.K. Mortgage Approvals Fell as Expiry of Tax Break Approached

U.K. mortgage approvals fell more than forecast in February, as the housing market cooled in anticipation of an imminent end to a 15,000-pound ($20,800) tax cut on property purchases.

Banks and building societies approved 87,669 loans, down from 97,350 in January, the Bank of England said Monday. Consumers continued to repay debt in the absence of opportunities to spend.

The dip in mortgage approvals may prove short lived, however. In his budget on March 3, Chancellor of the Exchequer Rishi Sunak extended the stamp-duty holiday to June 30. Many estate agents are predicting another good year for the housing market amid growing optimism about the economy as lockdown restrictions are eased.

Consumers repaid 1.2 billion pounds of personal debt in February, while a further 17.1 billion pounds built up in bank accounts.

Savings accumulated as a result of the pandemic closing stores now total well over 100 billion pounds, and Bank of England Chief Economist Andy Haldande says a strong recovery is possible if only a small amount of that money is spent.

©2021 Bloomberg L.P.

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