Banks reported an 8-year lending high last month as landlords looked to beat 1 April’s stamp duty increase on second homes.
The seven major banking groups reported gross lending of £17.1bn in March, which was up 64 per cent year-on-year.
The number of approvals was up 20 per cent year-on-year at 78,448. However, approvals dipped slightly from 79,159 in February.
BBA chief economic adviser Rebecca Harding says: “A surge in buy-to-let and second home buying ahead of the new stamp duty surcharge in April led to a sharp rise in March’s gross mortgage borrowing as people brought transactions forward.”
Mortgages for Business managing director David Whittaker says: “While the buy-to-let market adapts to the new stamp duty status quo, mortgage lending activity will settle somewhat in the second quarter of the year.
“Landlords will need a bit of time and space to factor in the financial cost of the changes and, if necessary, devise new investment strategies. Investors may also use this quieter period to work out how to manage the upcoming implementation of relief restrictions on the buy-to-let market, with some landlords opting to move to limited company mortgages to avoid many of the more costly changes. The impetus we’re seeing in the remortgaging sector isn’t going to lose any steam either, as existing homeowners continue to latch onto a better deal while they can.”