Lending was 43% higher than February (£18 billion), and 59% higher than March 2015 (£16.2 billion).
The results mark the highest March figure since 2007 when gross lending reached £30.9 billion.
Gross mortgage lending for the first quarter of this year was therefore an estimated £62.1 billion. This is the same level as in the previous quarter, but 39% higher than the first three months of 2015.
CML economist Mohammad Jamei said:
Against a backdrop of a recovering market, the substantial jump in lending in March was significantly influenced by a late surge of activity to beat the government’s stamp duty change on second properties, which came into effect at the start of April. The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we’ve seen.
As a result, we expect there will be about 10,000 fewer mortgaged transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March.
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented:
“Whilst these latest figures from the CML may seem to suggest that more people are securing mortgages, this rise in lending is actually the result of ever-increasing house prices. The reality is that today’s buyers are being forced to borrow more to cover the cost of their home, which is artificially inflating lending figures. If we want to see lending grow correctly and help more people afford their dream home, the Government and the construction industry must work together to alleviate the housing crisis by building at least 250,000 homes a year.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, added:
“Driven by the changes to Stamp Duty that kicked in from April, the mortgage market was firing on all cylinders in March as landlords, brokers and lenders shifted into top gear to complete on purchases. It is important to note that whilst landlords will have been the driving force for growth, the new rules also captured many different types of purchaser. Whatever the cause, the effects of the Stamp Duty changes saw lenders, brokers and conveyancers burning the midnight oil to keep borrowers happy and this was reflected in mortgage activity.
“Whether the spike is a one off phenomenon or not, the fundamentals of the market remain strong. The benign outlook for interest rates is supporting activity, while buyer finances are being bolstered by a strong labour market.”
