Gross mortgage lending rocketed by 30% in March because buyers rushed to beat the Stamp Duty deadline, according to the Council of Mortgage Lenders.
The Stamp Duty exemption for homes under £250,000 came to an end on March 24. As a result, March saw gross mortgage lending of £13.4bn – a 30% increase from the £10.3bn lent in February and a 17% rise from £11.4bn in March 2011.
This is the highest monthly total since September 2011 and the highest for March since 2008.
Bob Pannell, chief economist at the CML, says: “The increase in our March lending estimate appears to be almost entirely due to stronger house purchase activity. The most likely explanation is that buyers wanted to complete transactions before the end of the Stamp Duty concession on March 24.”
He adds that the trade body would be surprised if the market did not see a drop in transactions over the next few months.
Paul Hunt, managing director of Phoebus Software, says the figures demonstrate the importance of the Stamp Duty saving.
He says: “Unfortunately, the crest of every wave is followed by a trough and March’s mighty growth in lending is no exception.
“But at least the figures show there is still a substantial body of would-be first-time buyers looking to leave the private rental sector.”