Stamp duty surcharge leads to slowdown in buy-to-let activity
And the number of loans fell by 58% over the same period, the Council of Mortgage Lenders (CML) said.
The second home stamp duty surcharge prompted a huge surge in landlords buying second and further properties in advance of the deadline.
This caused a spike in purchases, followed by a drop-off in buy-to-let lending following the introduction of the 3% premium on second homes.
There was also a large drop in buy-to-let business in the first quarter of this year. Compared to the first quarter of 2016, the number of loans decreased by 39% and the amount borrowed by 40%.
But on a monthly basis, buy-to-let lending is more positive, up 4% by value and 8% by volume, between February 2017 and March.
In the wider mortgage market, homebuyers borrowed £11.2bn in March, up 24% on February but down 19% on March 2016. This came to 61,700 loans, up 27% on February but down 12% on March 2016.
First-time buyers borrowed £4.9bn for home-owner house purchase, up 29% on February and 9% on March 2016. They took out 31,500 loans, up 30% month-on-month and 12% year-on-year.
Home mover lending was down over the year. They borrowed £6.2bn, up 19% on February but down 33% year-on-year. This equated to 30,200 loans, up 24% month-on-month but down 28% compared to March 2016.
Remortgaging activity has increased over the last month and the past 12 months. In March it was up 13% by value and 14% by volume on February. Compared to March 2016, remortgage lending was up 22% by value and 24% by volume.
Paul Smee, director general of the CML, said: “Comparing this March to last year is misleading because of the peak in activity before the Stamp Duty changes last Spring. Overall, lending trends have remained reasonably consistent. The relatively sluggish activity among home-movers stands in contrast to the growth in first-time buyer and remortgage activity, but in aggregate the market is showing broadly the levels of activity we expected.
“As we head into the summer, we expect a continuation of these trends, with both first-time buyer and remortgage lending expected to maintain momentum in the light of the very attractive deals currently available.”