Following the surge in activity in March, April saw a significant fall in house purchase lending, in particular to first-time buyers, according to new data from the Council of Mortgage Lenders.
The drop off in activity for first-time buyers was seen mainly among properties that would have qualified for the exemption in March so were subject to stamp duty in April. Purchases of properties valued between £125,000 and £250,000 fell by 70% in April compared to March. In contrast those valued at £125,000 or below, so still exempt from stamp duty, fell by a more modest 11%, while first-time buyer purchases for properties over £250,000, so not eligible for the exemption in any case, fell by only 5%.
In total, 12,600 loans were advanced to first-time buyers, down by 48% compared to March and 12% compared to April 2011. By value, first-time buyers borrowed £1.5 billion, down 52% compared to March and 12% compared to April last year.
The change in the mix of properties bought had knock-on effects on first-time buyer loan characteristics. The average loan amount fell from £117,000 in March to £98,000 in April and first-time buyers typically borrowed 3.12 times their income, down from 3.34 in March.
Lending to home movers also fell. 23,400 loans worth £3.8 billion were taken out in April, down by 15% (14% by value) compared to March but an increase of 3% (by volume and value) compared to April 2011.
Total house purchase lending in April fell from 51,600 loans, worth £7.4 billion, in March to 36,000, worth £5.3 billion, in April. Remortgaging also saw a fall, with £3.1 billion advanced, down 14% compared with March and the lowest monthly total since December 2010.
Paul Smee, director general of CML, commented: "April's figures show the expected effect of the end of the stamp duty concession on UK mortgage lending. Given the economic uncertainty, any significant pick up in lending in the coming months seems unlikely.
"However, our recent research highlights that over 80% of people still aspire eventually to own their own homes, and long term demand clearly still exists."
June 15, 2012
Get started today
Speak to one of our mortgage experts. Book an appointment to come and see us or request one of our experts to call you.
To arrange a meeting with one of our expert mortgage advisers complete our enquiry form or mortgage questionnaire and we will call you back. Please note, by submitting this information you have given your agreement to receive verbal contact from us to discuss your mortgage requirements.
You voluntarily choose to provide personal details to us when submitting an enquiry. Your information is confidential and held in accordance with the appropriate data protection requirements. Read Trinity Financial's privacy policy.
We believe that working together is the best way to gain trust, reliability and certainty.
We had the pleasure of working with Jed on our mortgage. He guided us patiently and efficiently through any questions we...
We had the pleasure of working with Jed on our mortgage. He guided us patiently and efficiently through any questions we had and was always on hand to offer great advice. Excellent service and highly recommended!
More
Less
Cindy KoewandhonoAug 12 2024
Very happy with the exceptional service. David has demonstrated a high level of professionalism and expertise...
Very happy with the exceptional service. David has demonstrated a high level of professionalism and expertise.
More
Less
Marzena FranekAug 05 2024
We were looking for mortgage broker for our housing mortgage. Looked through some online brokers but decided to go with ...
We were looking for mortgage broker for our housing mortgage. Looked through some online brokers but decided to go with Trinity Financial.
Sophie was handling our case and because of her promptness we could secure the best rate at that time for us. Definitely recommend their services to anyone looking for a housing mortgage!
More
Less
Charusheela BopardikarJul 22 2024
15
years' experience
Over the last 15 years we have helped thousands of clients to purchase new homes, secure buy-to-let mortgages and remortgage.
23
mortgage experts
Trinity’s experts will do everything possible to secure the fastest mortgage offers while providing you with regular progress updates.
17,844
mortgages arranged
We consistently arrange fantastically priced fixed and tracker rate mortgages through the leading banks and building societies.