UK mortgage approvals hit 14-month low as tax break ends

London

BRITISH banks and building societies granted the fewest new mortgages for house purchase in more than a year last month as the government prepared to end a tax break on home purchases, Bank of England data showed on Friday.

Consumer lending also slowed more sharply than expected, which is likely to strengthen some analysts' concerns that Britain's rapid economic recovery from Covid-19 lockdowns is levelling off, just as the BOE considers raising interest rates.

The number of mortgage approvals fell to 72,645 in September from 74,214 the month before, the lowest since July 2020 when the government cut stamp duty land tax for most home purchases to boost sales after a slump at the start of the pandemic. This tax break was reduced in July and stopped in full at the end of September - before property purchases funded by mortgages approved that month would have time to complete.

However, net mortgage lending for transactions that completed in September surged to £9.524 billion (S$17.7 billion), its highest since June, the month before the tax break began to be reduced in England and Northern Ireland. REUTERS