Mortgage lending fell 11% last month, as the chronic undersupply of properties continues to dampen home mover activity.
The CML said that monthly mortgage lending fell 11% to £18.4 billion in April, slightly up on the £17.7 billion a year ago.
CML senior economist Mohammad Jamei said that while home movers were opting to stay put, first-time buyer and remortgage activity remained strong.
“First-time buyers and remortgage customers appear to be buoying the market, as low mortgage rates are encouraging borrowers to remortgage and attractive government schemes are helping first-time buyers. We expect this trend to continue over the coming months,” Jamei said.
“Home movers are having less luck. Their activity has been subdued for some time now and the low number of movers means fewer properties for sale. This supply and demand imbalance will continue to underpin house price values, even as the rate of price rises slows,” he added.
The CML said that first-time buyer activity exceeded home mover activity for the first time since 1996.
Over the last 12 months there were 345,000 first-time buyers – the highest since the start of 2008 – compared to 344,000 movers.
Home mover activity has been subdued for some time as they have benefitted far less from government help, resulting in fewer properties coming up for sale, the CML said.
Jeremy Duncombe, director, Legal & General Mortgage Club, said: “It is reassuring to see that all the main political parties have prioritised housing in their manifestos. However, simply recognising the problem isn’t enough. Whatever the outcome on 9 June, time is of the essence for our housing market and we need to see all the pledges to bolster building activity actually put into action.
“The fact of the matter is that we need more affordable homes across all tenures, be it for shared ownership, private rental or owner-occupiers. Only when we start to see a rise in the number of new and affordable homes being built, will we see a return to a healthy housing sector that caters for the majority, not the minority. “
In August, the Bank of England cut the base rate for the first time in seven years to 0.25%, prompting mortgage lenders to slash rates.
With the number of competitive deals on the market growing, many borrowers are choosing to remortgage to take advantage of the low rates currently on offer.
The housing market is continuing to slow, with average prices falling by £1,000 in the past month.
According to the latest data from the Office for National Statistics, on a monthly basis house prices fell 0.6% to £216,000 in March.
Nationwide reported that house prices dipped 0.4% in April, the first time house prices have fallen in consecutive months for nearly five years.
The figures add to the mounting collection of data which points to the housing market becoming increasingly affected by the growing squeeze on consumers.
Richard Bate, partner at law firm Gowling WLG, said the figures were reflective of buyer caution ahead of the election and the slight slowdown in UK growth.
He said: “The key economic drivers of the housing market remain the same though. Chronic undersupply of new housebuilding, interest rates remaining sensationally low by normal historic standards and strong employment. All of which point to stable pricing and a resumption of activity once the election is behind us and the new government is in office.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “It is disappointing given that we would have expected the market to be kicking on at this time of year in response to seasonal factors.
“The market is making steady rather than spectacular process, probably more influenced by concerns about what the election and Brexit will do to market prospects in the future.”
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