Mortgage lending to landlords plunged by 65% in April compared with the previous month, owed largely to the unusually high level of borrowing recorded in March ahead of stamp duty change as buy-to-let landlords rushed to beat the tax hike at the start of April.
In total, landlords took out 16,100 loans in total in April, collectively worth £2.5bn, down 7% in value terms year-on-year, according to the latest data provided by the Council of Mortgage Lenders (CML).
"We expect the market to take several months to return to its previous levels after the lending surge," said Paul Smee, director general of the CML.
Lending for general home acquisitions also fell sharply, down 40% month-on-month, with homeowners taking out a total of 47,300 loans collectively worth £8.1bn.
First-time buyers borrowed £3.9bn, down 11% on March but up 15% on April last year. This equated to 25,100 loans, down 9% month-on-month but up 7% year-on-year.
Remortgage activity totalled £6bn, representing a 25% drop compared with the total recorded in March and -40% compared to a year ago. Nevertheless, the volume of loans hit 34,800, up 23% month-on-month and 30% compared to a year ago.
Reflecting on the level of remortgaging activity, Andy Knee, chief executive of Legal Marketing Services, said: "It's great to see homeowners taking advantage of the favourable environment for remortgaging. Record low interest rates have improved affordability and home owners are sitting on huge amounts of housing equity that they may have been wary of capitalising on previously. The government is also consulting on seven day switching for faster transactions, the ease of which could drive the incentive for borrowers to revisit their mortgage faster."
Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!