Gross mortgage lending was down 11 per cent in April on a monthly basis, according to the latest data from the Council of Mortgage Lenders (CML).
It was estimated that total mortgage lending in April was £18.4 billion, down from 20.7 billion the previous month. However, the figure does mark a 4 per cent increase in relation to the £17.7 billion lent out in April 2016.
Buy to let lending was somewhat weaker during April, with the CML data suggesting that the number of loans for buy to let house purchases halved in the year following the announcement of the government’s stamp duty increase.
Prior to the stamp duty change, house purchase activity in the buy to let sector had amounted to 40 per cent of all buy to let lending, a figure which is now down to just 30 per cent.
However, overall and accounting for seasonal factors, April’s lending figure, which stood at £21 billion, was higher than average lending of £20 billion a month over the past year.
CML senior economist Mohammad Jamei said: ‘First-time buyers and remortgage customers appear to be buoying the market, as low mortgage rates are encouraging borrowers to remortgage and attractive government schemes are helping first-time buyers. We expect this trend to continue over the coming months.’
Henry Woodcock, principal mortgage consultant at Iress, added: ‘Lending in the buy-to-let market is down 80 per cent over the year since the stamp duty hike in March 2016 as landlords have viewed the tax changes imposed under the new rules as ‘penalties’. However, we must keep in mind that all things are relative and the market has been in rude health for quite some time now, so a slowdown is not altogether unexpected.
‘There are plenty of buying opportunities at the moment, with a Bank of England rate rise unlikely to happen before 2019. It’s now ten years since the last rate rise, and this low interest rate environment has boosted remortgage activity and stimulated fierce competition between lenders, with house buyers now able to secure some great deals. I don’t think the General Election itself is likely to have any significant effect on the market either way. I expect it to remain relatively steady for the foreseeable future.’