Homeowners borrowed £13.8 billion in March an increase of £5.1 billion and the highest monthly amount since August 2007.

The latest Council of Mortgage Lending (CML) figures show a strong increase in mortgage lending by value to first time buyers and home movers is up 60% to £13.8 billion for March when compared to last year.

By volume the numbers buying increased by 45% from 48,100 for March last year to 69,800 this year as homeowners take advantage of record low mortgage rates.

Lending to buy-to-let landlords is even higher due to the stamp duty tax deadline on 1 April and has increased 163% to £7.1 billion for the year.

There were 44,500 buy-to-let investors in March, compared to 23,600 last year a sharp increase of 143% as landlords try to beat the deadline.

First time buyer figures higher

Loans to first time buyers were 32% higher for the month by value at £4.5 billion and numbers were 28% higher at 28,100 although only 16% higher than this time last year.

In terms of affordability this has remained similar to last month even though the amount borrowed by first time buyers increased from £129,000 to £133,000.

This was due to the total household income increasing from £39,500 to £40,549 and therefore the borrowing to income multiple remains at 3.46.

Loan to value (LTV) was 82.6% with average deposit at 17.3% and average age is unchanged at 30 years.

The amount of gross income a first time buyer spent on capital and interest mortgage payments was 18%, the lowest since CML started collecting data in 2005.

Lending higher for home movers

Home movers also experienced strong figures with borrowing up 75% on February at £9.3bn and 82% higher compared to a year ago.

The total number of loans was 41,700 up 60% month-on-month and 58% higher than March 2015 and the average age of borrowers at 39 years.

Home movers are paying record low proportions of income on their mortgage at 17.8% compared to 18.1% in March last year with income multiples at 3.21 for an average loan amount of £180,000.

In contrast remortgage buyer activity by value decreased 2% for the month at £4.7 billion and a lower number of loans down 2% at 28,000.

According to Paul Smee, director general of the CML the March figures are distorted due to the rush to beat the introduction of additional stamp duty tax on second properties.

This has occurred with the seasonal upturn in activity before Easter and supercharged the levels of activity so the effect is likely to be temporary and will fall back in the summer.

For older homeowners there is significantly higher activity with equity release mortgage buyers accessing wealth in their property to consolidate debt, for home improvements or holidays.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as paying for care at home or gift to a family member.

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

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