Homeowners borrowed £8.2 billion for the month to April 2016 down £5.4 billion or 40% after a significant rise in mortgage activity last month.

Figures from the Council of Mortgage Lending (CML) show a fall in mortgage lending following a rush in March to beat the Stamp Duty Land Tax (SDLT) deadline.

There were 31% fewer homeowners including first time buyers and home movers arranging mortgages with 47,300 loans compared to 68,900 in the previous month.

For homeowners the value of mortgage loans reduced to only £8.2 billion down 40% for the month from £13.6 billion in March.

Home movers were particularly affected reducing 53.3% by value to only £2.2 billion and by numbers lower by 46.2% to 22,200.

Buy-to-let market significantly down

New house purchases for buy-to-let landlord reduced by 85.4% by number of loans to 4,200 compared to a staggering 28,700 arranged in March.

By value the market reduced even lower by 86.0% to only £600 million after reaching a high of £4.3 billion the previous month.

The number of landlords remortgaging was 25.9% lower at 11,700 and by value 29.6% down on the previous month at £1.9 Billion.

Paul Smee, director general of the CML has said the stamp duty change on buy-to-let landlords and homeowner second properties from April 2016 resulted in activity across the market being brought forward into March.

This has caused an expected slowdown in April’s lending figures in the aftermath.

As a result, house purchase activity experienced a sharp fall month on month, which was especially evident for buy-to-let investors.

Remortgage buyers have increased

The only good news was that remortgage buyers increased for month-on-month 23.4% more mortgages arranged at 34,800 and this increased by 30.3% year-on-year.

In terms of value this was £6.0 billion an increase of 25.0% over one month and a 39.5% increase over the year.

This was the highest volume of loans for remortgage in a month since July 2009, and the highest lending value for remortgage since January 2009, according to Paul Smee.

The reason for this is in part due to reducing cost of borrowing as lenders bring out cheaper fixed rate mortgage deals for homeowners.

For older homeowners there is higher activity with equity release mortgage buyers accessing cash from their property using to consolidate debt or home and garden improvements.

Average borrowing for first time buyers decreased during the month to £129,950 from £133,000 and for home movers this was also lower at £163,000 from £180,000 last month.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to improve your quality of life, pay for care at home or gift to a family member.

Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

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