April Mortgage Lending Declines Sharply from Previous Month
As had been forecasted there was a decline in the April data of mortgage lending. The Council of Mortgage Lenders (CML) reported that there was a sharp decline in mortgage lending in a month to month comparison of April to March. In March the stamp duty holiday that had been in effect for two years came to an end. The increase in mortgage lending in the first quarter driven by the upcoming expiration of the stamp duty holiday was expected to decline in the following months without the same incentive to push first time buyers to the market. The stamp duty holiday had offered 1 per cent savings on the cost of a property purchase up to £250,000 for first time buyers.
The CML April data revealed a 19 per cent decline in the level of gross mortgage lending to £10.2 billion from £12.6 billion. The year to year comparison however revealed a 2 per cent increase over April 2011.
Bob Pannell, chief economist with CML, said, “The underlying picture is likely to be a bit stronger than the April figure suggests, because some first-time buyers are likely to have brought forward their transactions to March to take advantage of the stamp duty concession that was coming to an end.
“Eurozone developments are highly uncertain and have the potential to undermine UK economic prospects and conditions in our housing and mortgage markets.
“The underlying picture is likely to be one of easing momentum in the housing market, but with potential for a sharper downwards correction on bad eurozone news.”