According to e.surv, 'economic uncertainty' and the new tax regime for BTL purchases have both played a part in the decrease.
Annually, house purchase lending dropped 14.9% from the 67,594 loans granted in April 2015. Preceding this year-on-year fall had been annual rises of 20.2%, 17.9% and 14.7% as stamp duty changes caused an uplift in overall lending levels. This also follows unprecedented high lending across the previous quarter, fuelled by buy-to-let borrowing.
However following the buy-to-let surge, the proportion of small-deposit lending rose from 17.1% to 19.1% and the number of completed sales to first-time buyers has "picked-up considerably".
Richard Sexton, director of e.surv chartered surveyors, commented: “The mortgage market is entering a more turbulent phase. As lenders steer for safety, three different forces are at work. First and foremost are the effects of the looming EU referendum on confidence and certainty for the UK. Whichever way the result, financial markets could see rapid shifts in the days and weeks beforehand – and especially immediately afterwards.
Secondly, the lending market is in one sense beginning to return to its normal rhythm after suffering a hangover from the party of buy-to-let activity seen earlier this year. As this excitement begins to wear off, a more normalised lending climate is beginning to reassert itself. Home lending is solid beneath this predicted surface slowdown – but now the headache is by no means over as new economic risks cause understandable caution from lenders. The third major break on mortgage lending is a deeper foreboding about the solidity of the UK economy – quite subtle but potentially more major."
