The Council of Mortgage Lenders (CML) has revealed that home-owners borrowed £13.8bn for house purchases in March, up 59% month-on-month and 60% year-on-year. They took out 69,800 loans, up 45% on February and 38% on March 2015.
In March, first-time buyers borrowed £4.5bn, up 32% on February and 29% on March last year. This totalled 28,100 loans, up 28% month-on-month and 17% year-on-year.
Meanwhile, home movers borrowed £9.3bn, up 75% on February and 82% compared to a year ago. This totalled 41,700 loans, up 60% month-on-month and 58% on March 2015.
Remortgage activity totalled £4.7bn, down 2% on February but up 7% compared to a year ago. This came to 28,000 loans, down 2% month-on-month but up 0.4% compared to a year ago.
Landlords borrowed £7.1bn, up 87% month-on-month and 163% year-on-year. This came to 45,000 loans in total, up 88% compared to February and up 142% compared to March 2015.
The CML said that, during the first quarter of 2016, home-owners borrowed £30.9bn for house purchase, down 9% quarter-on-quarter but up 33% year-on-year. They took out 164,200 loans, down 14% on the previous quarter but up 20% compared to the first quarter 2015.
First-time buyers borrowed £11.2bn, down 16% on the fourth quarter 2015 but up 22% on the first quarter last year. This totalled 71,500 loans, down 18% quarter-on-quarter but up 12% year-on-year.
Home movers borrowed £19.7bn, down 4% quarter-on-quarter but up 40% compared to a year ago. This totalled 92,700 loans, down 9% quarter-on-quarter but up 26% on quarter one 2015.
Remortgage activity totalled £15.4bn, up 2% on the fourth quarter 2015 and 25% compared to a year ago. This came to 90,100 loans, up 1% quarter-on-quarter and 15% compared to a year ago.
Landlords borrowed £14.6bn in the period, up 36% quarter-on-quarter and 92% year-on-year. This came to 92,700 loans in total, up 31% compared to the fourth quarter 2015 and 77% compared to the first quarter 2015.
Paul Smee, director general of the CML, said: “Activity was distorted in March due to a rush to beat the introduction of changes to stamp duty on second properties in April, alongside the seasonal uptick in activity before Easter.
“While the increases are substantial, these supercharged levels of activity are likely to be temporary and will fall back over the summer months.”
John Phillips, group operations director of Spicer Haart and Just Mortgages, said: “According to the CML’s latest figures, landlords borrowed £7.1 billion which is up 87% month-on-month. It is likely that this surge in activity was caused by the government’s change in stamp duty rates for second properties that came into effect in April, with many approved applications being completed before the deadline.
“Although the dust has started to settle on this recent change, we are likely to see further distortion in the mortgage market due to the impending EU referendum which will inevitably weigh on sentiment and could affect the economy as a whole. It is of course difficult to gauge exactly what will happen before and after the referendum, but it is widely anticipated that lending will return to more ‘normal’ levels in the coming months.”