You are here: Home - Mortgages - Buy To Let - News -

Stamp duty surcharge leads to slowdown in buy-to-let activity

Written by: Christina Hoghton
The value of buy-to-let lending has dropped by 60% since the Stamp Duty surcharge was introduced last April, according to figures from the mortgage lender trade body.

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.

Bigger picture

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.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week