Mortgage Lending in March Reaches Six Month High
Mortgage lending reached a six month high in March thanks to the ending of the two year stamp duty holiday. The savings offered by the government was for first time buyers that purchased a property up to the value of £250,000. The discount ended on March 24 and first time buyers rushed to take advantage moving mortgage lending into higher levels that seen in previous months.
The stamp duty holiday was allowed to lapse and in its place is a new opportunity for first time buyers to move into new construction homes with lower deposit levels of only 5 to 10 per cent. This scheme, called NewBuy, is supported by the government and building societies.
The latest data from the Council of Mortgage Lenders on the mortgage lending for March shows that gross mortgage lending was around £13.4 billion. This is a 30 per cent increase from the £10.3 billion reported in February and a 17 per cent increase over the level or mortgage lending reported for March 2011.
CML chief economist Bob Pannell said, "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."
Mortgage lending could decline with the end of the stamp duty holiday but recent news of rising interest rates on mortgage offers from lenders could keep levels upward.