Gross mortgage lending dropped by almost 20 per cent year-on-year in March, according to the latest estimate from the Council of Mortgage Lenders (CML).
The March lending total reached £21.4bn – up 19 per cent from £17.9bn in February but down by 19 per cent on the £26.3bn lent in March 2016.
The anticipated fall in year-on-year lending was attributed to a surge in activity last March as borrowers rushed to beat the second-property stamp duty deadline that came into effect from the beginning of April.
But Jeremy Duncombe, director, Legal & General Mortgage Club, said the dip in annual lending was down to “a severe shortage of affordable homes”.
He added: “Until we address this issue head on, it will continue to exclude many hopeful first time buyers and home movers.
“While our country has experienced numerous political changes recently, with potentially more yet to come, it is important that the government remains focused on delivering the promises that were pledged in the Housing White Paper.
“We need to reconsider our approach to stamp duty and green belt land, which are both archaic and desperately need re-evaluating. In doing so, these changes will help the government achieve its ambitious aim of building one million affordable homes by 2020.”
Gross mortgage lending for the first quarter of 2017 was an estimated £59.1bn - a 4 per cent decrease on the fourth quarter of last year and a 6 per cent decline on the £63bn lent in the first quarter of 2016.
CML senior economist Mohammad Jamei commented: “Mortgage lending appears to be in neutral gear. Our gross estimate for March is £21.4bn and this is broadly in line with average monthly lending over the past year.
“Within this aggregate level, there has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.
“We expect this profile to continue over the short-term, as low mortgage rates encourage existing borrowers to remortgage and government schemes help first-time buyers. We do not expect any marked effect from the General Election.”
simon.allin@ft.com
