However lending was 19% lower than March 2016 when borrowers rushed to beat the deadline for the 3% stamp duty surcharge.
Gross mortgage lending increased by 19% from February to reach £21.4bn in March, figures from the Council of Mortgage Lenders (CML) reveal.
However lending was 19% lower than March 2016 when borrowers rushed to beat the deadline for the 3% stamp duty surcharge.
Gross mortgage lending in the first quarter of 2017 was estimated to be £59.1bn, which is a 6% year-on-year fall.
Mohammad Jamei, senior economist at CML, said: “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.”
Jeremy Duncombe, director at Legal & General Mortgage Club, said: “A dip in annual gross mortgage lending reflects a truth that has been well-worn in housing commentary over the last few months.
“The market is being hamstrung by a severe shortage of affordable homes. 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 focussed on delivering the promises that were pledged in the Housing White Paper.”
John Eastgate, sales and marketing director at OneSavings Bank, said: “Mortgage activity has dipped in the first quarter and the forthcoming election will clearly add some complexity to the year.
“However the last few years have demonstrated very clearly that the mortgage market can negotiate even the trickiest political landscapes, so with interest rates looking set fair to stay low, relatively strong levels of demand will persist.”
Shaun Church, director at Private Finance, added: “While mortgage lending picked up last month after February’s lull, the overall picture for Q1 was fairly subdued.
“The push and pull effect of strong first-time buyer and remortgage activity combined with falling buy-to-let and home mover lending means the market is struggling to get into gear.
“Mortgage lending is expected to remain steady in the short-term however there are hurdles on the horizon that must be addressed if the market is to stay in good health.
“The deficiency of property supply is contributing to the relative lack of home mover activity, and poses a serious threat to buyer affordability in the long-term.”
