The Council of Mortgage Lenders (CML) has revealed that during February, home-owners borrowed £8.7bn for house purchase, up 4% month-on-month and 21% year-on-year. They took out 48,000 loans, up 4% on January and 12% on February 2015.
Meanwhile, first-time buyers borrowed £3.4bn, up 3% on January and 21% on February last year. This totalled 22,000 loans, up 3% month-on-month and 11% year-on-year.
Home movers borrowed £5.3bn, up 4% on January and up 20% compared to a year ago. This totalled 26,000 loans, up 4% month-on-month and up 14% on February 2015.
In addition, remortgage activity totalled £4.8bn, down 17% on January but up 37% compared to a year ago. This came to 28,400 loans, down 15% month-on-month but up 24% compared to a year ago.
Landlords borrowed £3.7bn in February, unchanged month-on-month but up 61% year-on-year. This came to 23,700 loans in total, up 1% compared to January and up 47% compared to February 2015.
Paul Smee, director general of the CML, said: “In 2016, there have been substantial increases in house purchase and remortgage activity year-on-year. This reflects the sluggish market in early 2015, perhaps driven by election uncertainties. Buy-to-let has also seen substantial year-on-year increases, with particularly strong growth in remortgaging, a pattern which we have seen in the buy-to-let sector the past six months.
“Activity has been boosted by landlords seeking to complete purchases before tax changes in April. We do not expect activity to show such strong year-on-year growth later in the year.”
Derek Mochan, CFO of LendInvest, added: “The Stamp Duty stampede was a big contributor to the significant year-on-year increase in gross mortgage lending to landlords in February. Property investors up and down the country understandably wanted to avoid the additional Stamp Duty charge for second homes, and so battled to the very last moment to get the deals done and save thousands on their purchases. Inevitably, there will be a drop in activity from the April figures onwards.
“For many wannabe amateur landlords, the sums simply don’t add up any more. The Government has introduced a range of measures which appear to be designed to professionalise the rental market, but its long-term impact remains to be seen.
“However the desire to invest in property remains strong. Savvy would-be property investors will instead look to alternative ways to make money from property, without actually becoming a landlord.”