Gross lending grew 16 per cent year-on-year in April, according to new figures from the Council of Mortgage Lenders.
Lending reached £18.5bn last month, which was 29 per cent lower than the £26.2bn achieved in March.
CML economist Mohammad Jamei says: “As we move past the stamp duty change that came into effect at the start of April, we expect to see a quieter second quarter, as some transactions that were due to take place were brought forward to the first quarter of this year. This is likely to mean that over the next few months buy-to-let takes a back seat as lending is driven by first-time buyers, movers and remortgage customers.
“The underlying picture still shows signs of growth, as the market remains underpinned by strong fundamentals such as increasing wages and rising employment. But it is possible that the uncertainty around the upcoming EU referendum in June will weigh on activity in the upcoming months.”
IRESS principal mortgage consultant Henry Woodcock says: “Even with the availability of high numbers of low interest rate mortgages deals, it’s no huge surprise that borrowing in April was so much lower than in March given the false peak which resulted from a rush to beat the Chancellor’s 3 per cent tax hike on BTL.
“Will we see a rise in lending in May? That will depend on a number of factors. Lenders may increase the number of long-term deals of up to 40 years to tempt borrowers struggling to afford shorter terms but, on the flip side, as the Bank of England interest rate remains static, lenders may increase interest rate margins. The lowest rate tracker deals have already risen by 0.24 per cent in the last six months. The unknown effect of the EU vote in June may further depress lending in May as borrowers wait and see both the result and the impact on lenders and house prices.”