Home buyer numbers increased in March, driven by a surge in first-time buyer activity, but the picture looks less rosy for buy-to-let investors.
First-time buyer and home mover activity came out of the seasonal winter dip with the highest monthly volumes of the year so far.
According to the Council of Mortgage Lenders, 61,700 loans were taken out during March, up 27% on February but down 12% on March 2016.
More loans were advanced to first-time buyers this year than in any March period since 2007.
First-time buyers took out 31,500 loans, up 30% from February and 12% for the year.
Home mover activity was up 24% on February but down 28% compared to March 2016, with 30,200 loans advanced.
Buy-to-let activity was driven by remortgage lending which accounted for nearly two-thirds of total lending.
The number of loans for buy-to-let house purchase advanced in March has plummeted 78% in the past year, with 6,500 loans handed out.
However, this can be attributed to the rush by landlords to beat the stamp duty deadline in April last year.
On a quarterly basis, house purchase activity was at its weakest for two years since the first quarter of 2015.
By contrast, the number of remortgage loans advanced to borrowers was at its highest since the first quarter of 2009 with 35,500 loans taken out, a rise of 14% from February.
Paul Smee, director general of the CML, said it was misleading to compare this March to last year because of the peak in activity before the stamp duty changes last spring.
“Overall, lending trends have remained reasonably consistent. The relatively sluggish activity among home-movers stands in contrast to the growth in first-time buyer and remortgage activity, but in aggregate the market is showing broadly the levels of activity we expected,” he said.
“As we head into the summer, we expect a continuation of these trends, with both first-time buyer and remortgage lending expected to maintain momentum in the light of the very attractive deals currently available.”
Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said: “While the housing market may be entering a bit of a lull, the number of people remortgaging continues to grow thanks to rock-bottom rates and increasing awareness of the possible savings among homeowners.
“This is causing competition amongst lenders in the remortgage market to heat up, with TSB making notable cuts to its remortgage rates just this week. I wouldn’t be surprised if more lenders followed suit to take advantage of this growing section of the market. This will certainly be good news for any borrowers thinking about switching.”
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