The amount of mortgage approvals for house purchase dropped in April following the surge in transactions ahead of the Stamp Duty changes, according to the latest Money and Credit report from the Bank of England (BoE).
Mortgage Approvals Drop in April after Stamp Duty Surgeand Credit report from the Bank of England (BoE).
In April, 66,250 loan approvals for house purchase were recorded, down from an average of 71,075 for the previous six months.
However, the number of approvals for remortgaging stood at 40,510 in April, broadly in line with the average over the previous six months.
The number of approvals for other purposes rose in April, up to 13,035 from an average of 12,425 for the previous six months.
As of 1st April, buy-to-let landlords and second homebuyers are charged an additional 3% in Stamp Duty. Our guide will help you understand how the higher tax rate will be implemented: /landlords-guide-3-stamp-duty-surcharge/
The Director of e.surv chartered surveyors, Richard Sexton, comments on the data: “After an extraordinary lift earlier this year, April saw house purchase approvals drop slightly, as activity in the lending market settled down. This natural slowdown follows the flurry in buy-to-let activity following April’s Stamp Duty deadline, but June’s referendum could also be causing temporary caution.
“Remortgaging remains strong however, with lenders offering a variety of new and increasingly flexible mortgage rates for existing homeowners. And it’s not just the remortgaging sector with a spring in its step; overall house purchase approvals may be down, but first time buyers are still very much in the game.”
He continues: “An increase in available mortgage deals is playing into the hands of first timers too, providing further choices and even inter-generational solutions. House prices continue to increase, but financial factors – particularly low inflation and rising wages – are helping first timers step onto the property ladder. Both factors have helped savings, and, with Government schemes such as the Lifetime ISA leading the way, there’s nothing to suggest first time buyer lending won’t go from strength-to-strength as we approach the second half of the year.”