Gross mortgage lending hit £21.4bn in March, down 19 per cent year-on-year but up 19 per cent month-on-month, according to the Council of Mortgage Lenders.
The sharp fall in year-on-year lending was expected, as March last year saw significant rises in activity as borrowers rushed to beat the second property stamp duty deadline that came into effect from the beginning of April.
Gross mortgage lending for the first quarter of 2017 was around £59.1bn, 4 per cent fewer than Q4 2016 and 6 per cent fewer than the £63bn lent in the first quarter of 2016.
CML senior economist Mohammad Jamei says: “Mortgage lending appears to be in neutral gear. Our gross estimate for March is £21.4bn and this is broadly in line with average monthly lending over the past year. Within this aggregate level, there has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.
“We expect this profile to continue over the short-term, as low mortgage rates encourage existing borrowers to remortgage and government schemes help first-time buyers. We do not expect any marked effect from the general election.”
Legal & General Mortgage Club director Jeremy Duncombe says: “A dip in annual gross mortgage lending reflects a truth that has been well-worn in housing commentary over the last few months: the market is being hamstrung by a severe shortage of affordable homes.
“Until we address this issue head on, it will continue to exclude many hopeful first time buyers and home movers.”
Anderson Harris director Jonathan Harris says: “The mortgage market continues to tick along with competitive products on offer to those borrowers who are getting on with the business of buying and selling, or remortgaging their homes.
“While the general election is a distraction, there is only a few weeks until it will all be over so it doesn’t look as though it will have too much of an impact on people’s decision-making.
“With Atom Bank launching a five-year fix at a rock-bottom rate of 1.29 per cent last week, only to pull it yesterday, it is clear that there is a real appetite from borrowers for competitive products.”