Home-owners borrowed £8.1bn for house purchase in April, down 40 per cent month-on-month and 4 per cent year-on-year, according to the Council of Mortgage Lenders.
First-time buyers borrowed £3.9bn, down 11 per cent on March, but up 15 per cent on April last year, while home movers borrowed £4.3bn in April, down 53 per cent on March and 14 per cent compared to a year ago.
However, remortgage activity totalled £6bn, up by a quarter on March and up 40 per cent compared to a year ago.
Landlords borrowed £2.5bn, down 65 per cent month-on-month and 7 per cent year-on-year. This came to 16,100 loans in total, down 64 per cent compared to March and down 10 per cent compared to April 2015.
Paul Smee, director general of the CML, said there is a sense of calm after the storm, as lending eased back following the significant rises in activity in March as borrowers looked to beat the second property stamp duty deadline.
“We expect the market to take several months to return to its previous levels after the lending surge,” he added.
Number of loans for house purchase and remortgage:
1 month change
12 month change
Gross buy-to-let lending dipped as expected, as landlords rushed to beat the 1 April deadline, leading to the lowest volume of loans for buy-to-let lending since June 2014.
Meanwhile, affordability metrics for first-time buyers remained relatively stable. Even though the typical loan size decreased to £130,000 from £133,000 this was offset by the household income of borrowers also decreasing slightly from £40,600 in March to £39,700 in April.
Home movers showed a similar trend, with the average amount borrowed decreasing to £162,995 from £180,000 in March, and the average household income of a home mover also decreasing from £58,400 to £52,500.
Remortgage lending was the only lending type to show both month-on-month and year-on-year increases in April, with the highest volume of loans for remortgage in a month since July 2009 and the highest lending value for remortgage since January 2009.
Simon Checkley, managing director of mortgage brokers Private Finance, noted CML predictions that lending will begin to stabilise towards the end of the summer and for the rest of the year, largely due to the fact that in spite of an increased regulatory burden in the form of the Mortgage Credit Directive, the majority of lenders will be focussed on staying competitive in the market.
“We are fairly confident in predicting that we will continue to see attractively priced products available from as little as the 1.14 per cent around today. Furthermore, we believe that regardless of the outcome of next week’s referendum, the economy is currently strong enough to ensure activity levels remain buoyant as we move into the second half of the year.”