2 June 2025
If you are covering the latest Money and Credit statistics from the Bank of England, please see the following comments from Holly Tomlinson, financial planner at Quilter:
"The Bank of England’s latest Money and Credit figures show just how much the housing market was distorted by the recent stamp duty threshold changes. March saw a flurry of completions as buyers rushed to beat the deadline, but that activity then fell off a cliff in April with net borrowing falling into negative territory and mortgage approvals for house purchases dropping for the fourth consecutive month.
"It’s clear the return to lower thresholds has dampened demand. But while the number of transactions has been hit, house prices have remained surprisingly resilient. Nationwide’s index out this morning showed a 0.5% rise in May, recovering from April’s fall, suggesting the supply-demand balance is still supporting prices even as affordability remains stretched.
"For first-time buyers, the changes are particularly painful. Someone purchasing a £400,000 home now faces a £5,000 stamp duty bill, where previously there was none. That creates a higher bar to entry just as mortgage rates, while easing slightly, remain well above the ultra-low levels many had hoped might return.
"On the remortgage front, activity has edged up as borrowers continue to shop around, with many hoping the Bank of England will continue to cut interest rates in the months ahead.
"The jump in consumer credit borrowing to £1.6 billion, from £1.1 billion, also highlights the broader strain on household finances. Credit card debt in particular is growing at pace, and with rates on these products still eye-wateringly high, that raises longer-term concerns around financial resilience.
"Meanwhile, ISA season led to a record £14 billion of deposits in April as savers use up allowances before and after the tax year end. Rumours of changes to the cash ISA allowance may also have prompted people to put more into ISAs in fear that change might be coming."
