In March lending stood at £17.1bn ahead of the stamp duty surcharge deadline on 1 April.
The rush to buy investment properties and second homes before the 3% stamp duty surcharge came into force led to a 64% lending increase in the year to March, figures from the British Bankers Association revealed today.
In March lending stood at £17.1bn ahead of the stamp duty surcharge deadline on 1 April.
Mortgage approvals were up 20% on March last year, with remortgaging rising by 25% and house purchase lending by 14%.
David Whittaker, managing director of Mortgages for Business, said: “The significant surge in mortgage approvals represents the culmination of several weeks – even months – of work from buy-to-let investors who have been rushing to complete their mortgage applications before the now-infamous 3% Stamp Duty levy kicked in on 1 April.
“On our side, we’ve been pedalling furiously to get cases closed and completed before the April deadline, and have successfully saved many of our clients thousands of pounds.
“While the buy-to-let market adapts to the new stamp duty status quo, mortgage lending activity will settle somewhat in the second quarter of the year. Landlords will need a bit of time and space to factor in the financial cost of the changes and, if necessary, devise new investment strategies.”
Jeremy Leaf, a former RICS chairman and north London estate agent, added: "This month we have still seen plenty of first-time buyers as the withdrawal from the market of investors has presented them with an opportunity.
"First-time buyers are still taking advantage of low mortgage rates and these don’t look set to rise anytime soon. However, demand overall will be down until investors seek to dip a toe in the water again.
"Prices are softening generally but not by a huge amount yet. The market has been a little bit distorted with the Easter break and the school holidays. It is not unreasonable to suggest that prices will soften further with the Mayoral election and Brexit having an impact on confidence."
