UK mortgage lending slumps in April as credit card borrowing surges

Mortgage borrowing by UK households plunged in April, while credit card spending surged, according to Bank of England data published Monday.

Net mortgage borrowing fell to negative £800 million in April from a sharp rise of £13.0 billion in March, marking the first net repayment since late 2023. Gross lending dropped to £16.9 billion from £39.9 billion – the steepest monthly fall since June 2021 – while repayments eased to £18.4 billion from £23.7 billion.

Mortgage approvals for house purchases declined for the third consecutive month, slipping by 3,100 to 60,500. Remortgage approvals, however, rose by 1,600 to 35,300.

The slowdown in purchase approvals comes amid the impact of new stamp duty thresholds that took effect on April 1.

As part of her October budget, Chancellor Rachel Reeves announced the government would lower the thresholds in England and Northern Ireland. Buyers must now pay stamp duty on properties priced over £125,000, down from £250,000 previously. First-time buyers face the tax on homes over £300,000, compared with a higher £425,000 threshold before the change.

The Bank of England also reported that consumer credit borrowing rose to £1.6 billion in April from £1.1 billion in March, driven by a doubling in credit card borrowing to £800 million. The annual growth rate for total consumer credit picked up to 6.7% from 6.2%, while credit card borrowing accelerated to 9.8%.

Household deposits grew by £3.0 billion, helped by record ISA inflows of £14.0 billion. Withdrawals from sight deposits partly offset the gain.

For businesses, private non-financial corporations repaid £2.4 billion in April, including £3.2 billion in equity buybacks and £800 million in bond redemptions. Business deposits declined by £7.0 billion after a strong March inflow.

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