The housing market is likely to remain “lopsided” in the coming months with first-time buyers driving momentum, while buy-to-let activity will be subdued.
According to the Council of Mortgage Lenders, first-time buyers borrowed £4.1 billion in April, down 16% on March but up 8% on April last year.
Buy-to-let lending has shot up 33% in the past year, with £800 billion handed out in April.
However, this is largely a result of a distortion in the market from buyers bringing forward transactions to beat the 3% stamp duty increase introduced in April 2016.
The CML said: “The number of loans for buy-to-let house purchase advanced in April remained low compared to activity seen before the change on stamp duty on second properties introduced in April last year.”
Home movers borrowed £5.5 billion, down 11% on March but up 28% for the year.
There was a fall in remortgage activity of 16% to £5.2 billion.
Paul Smee, director general of the CML, said: “April comparisons are distorted by the weakness last year following the stamp duty changes, and the normal seasonal lending surge in March. But the seasonally-adjusted picture shows lending relatively unchanged month-on-month across all lending segments.
“Heading into the summer months, we expect the market to remain slightly lopsided. Buy-to-let and home movers may well remain subdued, as they have been for the last six months. But both first-time buyer and remortgage lending should maintain momentum on the coattails of the attractive deals available.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “On the lending front it is very much business as usual with lenders keen to lend and the oversupply of money set to keep mortgage rates competitive for the foreseeable future.
“Demand from landlords remains muted as investors get to trips with tax changes and higher stamp duty. But first-time buyers and those remortgaging are making hay while the sun shines in terms of taking advantage of cheap mortgage deals.
“There has been a lot of repricing downwards in terms of mortgage pricing, with Accord, Virgin Money, Platform, New Street and Tesco all cutting rates. With transaction levels in the housing market muted, the chase for volume falls on remortgages so we are seeing a number of remortgage-only products priced more keenly than their purchase equivalents.”
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