Buy to let stampede not enough to stop mortgage lending from rising in April
The housing market shows no sign of letting up as mortgage lending came to a post-crisis high for the month of April, despite the buy to let stampede in March.
Gross mortgage lending – the amount dished out by lenders to people buying new homes – came in at £18.5bn in April, up 16 per cent over the year according to the Council of Mortgage Lenders (CML).
As investors rushed to beat stamp duty changes which came into effect on 1 April, lending figures for March surged to £26.2bn. The CML previously warned that the distortion could cool the market for the rest of the year, though today's figures show lending is still heading up.
"The market remains underpinned by strong fundamentals such as increasing wages and rising employment," CML economist Mohammad Jamei said.
He added: "Over the next few months, buy to let [will likely] take a back seat as lending is driven by first-time buyers, movers and remortgages."
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Jeremy Duncombe, director of the Legal and General mortgage club expressed concern that although mortgage lending was rising, the number of mortgage approvals appeared stagnant.
"It's clear that consumers are having to borrow greater amounts from lenders as property prices continue their unsustainable rise, well above any increase in wages. The fact of the matter is, we are simply not building enough homes," he said.