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Gross lending soars to £25.7bn in March: CML

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A rush to beat the stamp duty deadline caused gross mortgage lending to soar 43 per cent month-on-month and hit £25.7bn in March, according to the Council of Mortgage Lenders.

Gross lending was 59 per cent higher than the previous March’s figure of £16.2bn and is the highest March figure since 2007, when gross lending reached £30.9bn.

The CML estimates gross mortgage lending for the first quarter of this year was around £62.1bn.

This is the same level as in the previous quarter, but 39 per cent higher than the first three months of 2015.

CML economist Mohammad Jamei says: “Against a backdrop of a recovering market, the substantial jump in lending in March was significantly influenced by a late surge of activity to beat the government’s stamp duty change on second properties, which came into effect at the start of April.

“The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we’ve seen.

“As a result, we expect there will be about 10,000 fewer mortgaged transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March.”

Legal & General Mortgage Club director Jeremy Duncombe says: “Whilst these latest figures from the CML may seem to suggest that more people are securing mortgages, this rise in lending is actually the result of ever-increasing house prices.

“The reality is that today’s buyers are being forced to borrow more to cover the cost of their home, which is artificially inflating lending figures.”

Kensington head of sales and distribution Steve Griffiths says: “These latest figures from the CML confirm that lending is continuing to rise, which is great news. But we must remember that a healthy market is judged not just on its size, but also the diversity of its offering.

“The UK has experienced a significant rise in the number of self-employed and contract workers in recent years, and there are numerous reasons why a customer can find that their circumstances do not always fit within the boxes of a standard mortgage application.

“But there are usually options for these customers. As an industry we need to work harder to communicate these opportunities. In doing so, we can not only grow our market size but also its diversity.”

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