Large rise in gross mortgage lending

The end of the stamp duty ‘holiday’ is the likely reason behind March’s increase in gross mortgage lending, the Council of Mortgage Lenders (CML) has noted.

Gross mortgage lending last month was an estimated £13.4 billion, a 30% rise from £10.3 billion in February and a 17% rise from March last year.

This is the highest monthly total since September 2011 and the highest monthly total for March since 2008.

“The increase in our March lending estimate appears to be almost entirely due to stronger house purchase activity,” said Bob Pannell, the CML’s chief economist. “The most likely explanation is that buyers wanted to complete their transactions before the end of the stamp duty concession on 24 March.

“The underlying picture for house purchase activity has been relatively buoyant in recent months. However, we would be surprised if we did not see a drop in transactions over the next few months, following the end of the stamp duty concession, especially as it will take some while for NewBuy transaction levels to build.”

Gross lending for the first quarter of this year was an estimated £34.4 billion, down from £37.8 billion in the previous quarter but a 13% increase from the first three months of 2011.