Slump in lending for house purchases in April
Lending was down in April in all areas of the mortgage market, except for remortgage business, according to figures from the Council of Mortgage Lenders.
And lending for house purchase and buy-to-let saw the biggest slumps.
Homeowners borrowed £8.1bn for house purchase, down 40% month-on-month and 4% year-on-year. They took out 47,300 loans, down 31% on March and 5% on April 2015.
First-time buyers borrowed £3.9bn, down 11% on March but up 15% on April last year. And homemovers borrowed £4.3bn, down 53% on March and 14% compared to a year ago.
Buy-to-let lending was also down, in terms of value and the number of loans. Landlords borrowed £2.5bn, down 65% month-on-month and 7% year-on-year. This came to 16,100 loans in total, down 64% compared to March and down 10% compared to April 2015.
Surge in switching
Remortgaging increased significantly in April. Lending totalled £6bn, up 25% on March and 40% compared to a year ago. This came to 34,800 loans, up 23% month-on-month and 30% compared to a year ago.
Remortgage lending was the only lending type to show both month-on-month and year-on-year increases in April, experiencing the highest volume of loans for remortgage in a month since July 2009, and the highest lending value for remortgage since January 2009.
Paul Smee, director general of the CML, said: “There is a sense of calm after the storm this month, as lending eased back, following the significant rises in activity in March as borrowers looked to beat the second property stamp duty deadline. We expect the market to take several months to return to its previous levels after the lending surge.”