UK homebuyers significantly increased mortgage borrowing in March, rushing to take advantage of a tax break before it expired. According to Bank of England (BoE) data released Thursday,

net mortgage lending jumped by £12.96 billion ($17.27 billion) — the largest monthly increase since June 2021, when the pandemic fueled a housing boom.

The surge came just ahead of April 1, when the UK government ended a temporary tax discount for first-time buyers and raised the surcharge on second homes. Since then, the housing market has begun to cool. Nationwide reported this week that house prices fell in April by the most in nearly 18 months.

Meanwhile, mortgage approvals — a key early indicator of future borrowing — dipped slightly to 64,309 in March, down from 65,093 in February and just under the 64,800 forecasted by economists.

Broader economic signals suggest growing caution among UK consumers. Net unsecured borrowing rose by only £0.9 billion in March, down from £1.3 billion in February and below the expected £1.2 billion, signaling a slowdown in consumer credit use.

The UK's economic outlook has also been affected by global trade tensions, including new U.S. import tariffs. Recent data shows that British manufacturers experienced the steepest export drop since May 2020.

"Households appeared to be pulling back on spending even before the full impact of new U.S. tariffs is felt," said Ashley Webb, UK economist at Capital Economics.

The BoE is widely expected to cut interest rates by 0.25 percentage points to 4.25% next week. Simon Gammon of Knight Frank Finance added, “Lower mortgage rates could boost housing activity later this year — provided global trade tensions ease and the UK economy stays on course.”