Mortgage borrowing in the UK fell 30 percent month-on-month in April to 36,000 loans valued at £5.3 billion (S$10.5 billion), according to the Council of Mortgage Lenders (CML).
The sharp drop occurred after the deadline for stamp-duty concession ended on 24 March, said the CML.
In April, a total of 12,600 loans valued at £1.5 billion (S$2.98 billion) were advanced to first-time home buyers. This is almost half of what was reported in March, when buyers rushed to beat the concession deadline.
“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,” said Paul Smee, Director General at the CML.
The decline in first-time buyer activity was especially evident for homes worth between £125,000 (S$248,703) and £250,000 (S$497,407), as these were exempted from stamp duty until 24 March. Transactions involving these homes fell by 70 percent month-on-month in April.
Due to the economic uncertainty, CML does not expect a substantial pick-up in lending over the coming months.
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