The Council of Mortgage Lenders (CML) has estimated that gross mortgage lending totalled £18.5 billion in April.
This is 29% lower than March’s lending total of £26.2 billion, but 16% higher than the £16 billion lent in April last year. This is the highest lending total for an April since 2008 (£25.3 billion).
CML economist Mohammad Jamei said: “As we move past the stamp duty change that came into effect at the start of April, we expect to see a quieter second quarter, as some transactions that were due to take place were brought forward to the first quarter of this year. This is likely to mean that over the next few months buy-to-let takes a back seat as lending is driven by first-time buyers, movers and remortgage customers.
“The underlying picture still shows signs of growth, as the market remains underpinned by strong fundamentals such as increasing wages and rising employment. But it is possible that the uncertainty around the upcoming EU referendum in June will weigh on activity in the upcoming months.”
Andrew McPhillips, Yorkshire Building Society chief economist, added: “Although the rush to beat the new stamp duty rate has subsided, mortgage and housing market activity is unlikely to normalise any time soon. The looming EU referendum may cause some people to be more hesitant about buying a property, particularly overseas investors. This may cause further distortion in mortgage and housing market activity though is likely to be more heavily focused on specific regions of the UK such as London and the South East.
“This could lead to the mortgage and housing markets being less predictable, at least in the short-term. Additionally, given that indices which measure market activity do so in different ways, we might see more variation than usual in the month-on-month growth recorded by different house price indices and other market monitoring devices over the coming months.
“When the market shows unpredictable behaviour as it may well do in the coming months, it’s important to not get caught up in short-term market fluctuations and instead look to the long-term trends. Demand may fluctuate, but supply remains tight, meaning that mortgage lending and house prices alike should show growth in the long-term, as people’s appetite to own a home is likely to remain strong in the future.”