Buy-to-let lending fell by 65% in April

Ryan Bembridge

June 15, 2016

down arrow 3

Buy-to-let mortgage lending fell by 65% in April after the 3% stamp duty surcharge came into force, Council of Mortgage Lenders figures show.

Landlords borrowed £2.5bn in April, a 65% reduction from March and a 7% fall year-on-year.

Month-on-month lending also fell by 53% for homemovers, 40% for homeowners and 11% for first-time buyers.

City house price inflation slows

Paul Smee, director general of the CML, said: “There is a sense of calm after the storm this month, as lending eased back, following the significant rises in activity in March as borrowers looked to beat the second property stamp duty deadline.

“We expect the market to take several months to return to its previous levels after the lending surge.”

Remortgage activity bucked the trend by rising by 25% on March and 40% from a year ago.

John Phillips, group operations director of Spicer Haart and Just Mortgages, said: “The CML’s latest figures show that although house purchase activity has experienced a sharp fall month on month, the market is still underpinned by strong fundamentals such as rising employment and improving wages, suggesting that the market will continue to grow but is likely to take several months to return to its previous levels of lending.

“Although lending will continue to be driven by movers, first-time buyers and remortgage customers, I think the unknown effect of the impending EU referendum later this month will certainly weigh on activity in the coming months, as borrowers wait to see the result and its impact on the housing market.”