Liquid error: wrong number of arguments (2 for 1) Mortgage lending in UK fell in April, but no surprise due to March buy let boost | Marsh & Parsons Sales and Lettings Estate Agents London

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Mortgage lending in UK fell in April, but no surprise due to March buy let boost

Thu 19 May 2016

Friday, 20 May 2016 Gross mortgage lending in the UK reached 18.5 billion in April, some 29% lower thanMarch's lending total of 26.2 billion, but 16% higher than the 16 billion lent in April last year. CML economistMohammad Jamei pointed out that a fall was expected due to a rush in buy to let lending in March as landlordsrushed through sales to beat the new 3% surcharge on additional homes that was introduced on 01 April.

As wemove past the stamp duty change that came into effect at the start of April, we expect to see a quieter secondquarter, as some transactions that were due to take place were brought forward to the first quarter of this year,' heexplained.This is likely to mean that over the next few months buy to let takes a back seat as lending is driven byfirst time buyers, movers and remortgage customers. The underlying picture still shows signs of growth, as themarket remains underpinned by strong fundamentals such as increasing wages and rising employment,' hepointed out.

But it is possible that the uncertainty around the upcoming European Union referendum in June willweigh on activity in the upcoming months,' he added.According to David Brown, chief executive officer of Marsh& Parsons, April lending was never going to live up to the March boost which was characterised by massivelyincreased borrowing to landlords and second home owners.

But while we've seen a bit of a monthly comedownsince then, the annual fundamentals are indicative of strength in the mortgage market. Widely expected to be anunderwhelming month, April has still set an impressive benchmark for this time of the year, with lending levelsharking back to the pre-recession era,' he said.Buy to let investors are just one type of buyer after all, andborrowing isn't going to ground to a halt while they have a breather.

The stamp duty changes didn't affect theplans and intentions of hordes of other first time buyers and home movers, and in these areas buyer demand isstill bursting at the seams,' he added.David Whittaker, managing director of Mortgages for Business, pointed outthat underneath the month on month lending patterns, there is a strong and steady current of buy to let lendingcritical to meet growing public demand for private rented accommodation.Underlying annual growth in Aprilshows a more sustainable path aside from any short term fluctuations and the need for buy to let mortgages tosupport the role of landlords,' he added.

The extremes of March make it futile to try to extract any meaningfulinsight from April's numbers, according to John Eastgate, sales and marketing director of OneSavings Bank.More importantly, market feedback suggests that normality has returned at enquiry level, although it will be thethird quarter before we see this in new lending,' he said.A strong undercurrent of demand and a growing UKpopulation means that we can largely ignore these numbers and focus on longer term trends and nderlyingfundamentals.

House prices have increased 9% in the last year, a symptom of heightened demand stilloutstripping limited supply, and with the UK Employment levels hitting fresh highs this week, more people are in aposition to consider purchasing a property,' he explained.

Mortgage rates are still historically low for bothprospective home owners and investors, and with interest rate rises remaining a distant speck on the horizon,mortgage lending figures should return to an even keel in coming months,' he added.

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