Mortgage Lending on the Rise Again According To Latest Bank of England Statistics

Will North, director of core credit at TransUnion in the UK, comments on the latest Money and Credit statistics from the Bank of England:

“The extension of the stamp duty holiday is a likely factor behind the increase in net mortgage borrowing, which bounced back to £6.6bn in May, up from £3bn the previous month. The stamp duty holiday was extended from 31 March to 30 June, meaning buyers pay no stamp duty on the first £500,000 of a residential property purchase, as long as it’s completed before the end of June. This is seemingly driving an increase in activity as that date draws near. After that, the relief will be tapered until 30 September, meaning a residential property bought for up to £250,000 will be exempt from the tax until that date, which may help sustain activity over the next few months.

“Consumers have made significant repayments on credit throughout the pandemic, but in May they borrowed more than they paid off for the first time since August last year, with net borrowing at £0.3bn. This is likely due to a combination of factors, with some households spending more as lockdowns ease whilst others are simply struggling to continue paying down debt.

“Our own research showed that whilst 35% of consumers had been able to increase their savingsi through the pandemic, 32% of UK households are currently negatively financially impacted, according to our latest Consumer Pulse Studyii. This polarising impact of COVID-19 is likely to come into sharper focus as financial accommodations come to an end over the coming months, so it’s essential that finance providers have the best possible data and insights at their disposal. Having a comprehensive understanding of an individual’s financial situation will support lenders in making informed decisions about affordability, and in creating tailored customer support plans as we navigate our way forward on the road to recovery.”


i Based on a survey of 2,000 UK adults (18+) carried out on behalf of TransUnion in March 2021

ii TransUnion’s Consumer Pulse Study (formerly the Financial Hardship Study), based on research conducted among 1,027 adults between 2-3 June 2021