Remortgages dropped by both value and number in April, but first-time buyer purchases increased, the latest figures from UK Finance show.
The number of remortgages fell by 6.2 per cent to 9,140 in April when compared to the same month last year.
The value of remortgages also fell by 8.1 per cent to £3.3bn over the same comparison period, although there was an increase in the number of home owners remortgaging to borrow more.
Mortgages for first-time buyers rose by 11 per cent year on year to reach £4.6bn, while the number of loans to this group also increased by 7.9 per cent to 27,370.
The value of loans to home movers increased by 10.2 per cent to £5.6bn and the number of loans to this group increased by 6.4 per cent to 25,450.
Buy-to-let lending volumes remained completely unchanged from a year ago, with £0.7bn advanced for new purchases and £2.3bn for landlord remortgaging.
North London estate agent and former RICS residential chairman Jeremy Leaf says: “The UK Finance figures are a little historic but confirm that first-time buyers are increasingly taking advantage of improving affordability and reduced competition from buy-to-let landlords reeling from previous and imminent tax and regulatory changes.
“Help to Buy, for all its criticisms, is still proving a useful tool and we are finding that many lenders will not do business with developers unless the scheme is on offer to its customers.”
Coreco director Andrew Montlake says: “Given Help to Buy, the strong jobs market, increased product choice at higher loan-to-values and lower house prices, it is no surprise first-time buyers were the key driver of activity in April.
“What’s interesting is that the impact of recent tax changes on the buy-to-let market appears to have settled down.
“The buy-to-let market is not what it was but has now reached a new equilibrium.”
Montlake says the rise in borrowers increasing their loan size when remortgaging shows how many people are adding value to their existing homes in anticipation of a sale further down the line when the market improves.