Mortgage lending fell 30% in April
Mortgage lending fell by 30 per cent in April, with just 36,000 home loans approved, according to the Council of Mortgage Lenders (CML).
The fall followed the end of the stamp duty concession for first-time buyers, and loans to this group fell by nearly a half, to 12,600 in April.
Many first-time buyers rushed to buy a property before the end of March, to avoid having to pay 1 per cent stamp duty on properties worth between £125,000 and £250,000.
The number of loans on properties in this price range fell by 70 per cent in April compared with the previous month.
Paul Smee, director general of the CML, said: “April’s figures show the expected effect of the end of the stamp duty concession on UK mortgage lending.
“Given the economic uncertainty, any significant pick up in lending in the coming months seems unlikely.”
Total mortgage lending in April fell to £5.3 billion, a decline of more than £2 billion from the previous month.
In the face of the ongoing crisis in the eurozone, the Chancellor, George Osborne, has announced £100 billion of funding to help banks increase their lending levels and to boot the UK economy.
The government, in partnership with the Bank of England, is launching a ‘funding for lending’ scheme, which will offer cheaper funding to banks in exchange for lending commitments.
The scheme is expected to lead to £80bn of new loans, boosting the supply of mortgages and also providing support for businesses to expand.
Mr Osborne said: “The Government – with the help of the Bank of England – will not stand on the sidelines and do nothing as the storm gathers.
“We are rolling up our sleeves and doing everything possible to protect British families and firms.”