"First-time buyers and remortgage customers appear to be buoying the market, as low mortgage rates are encouraging borrowers to remortgage"
This is 11% lower than March’s lending total of £20.7 billion, but 4% higher than the £17.7 billion lent in April last year.
CML data shows that low mortgage rates are encouraging first-time buyers and remortgagors, but a lack of supply is hindering homemovers.
CML senior economist, Mohammad Jamei, said: "First-time buyers and remortgage customers appear to be buoying the market, as low mortgage rates are encouraging borrowers to remortgage and attractive government schemes are helping first-time buyers. We expect this trend to continue over the coming months.
"Home movers are having less luck. Their activity has been subdued for some time now and the low number of movers means fewer properties for sale. This supply and demand imbalance will continue to underpin house price values, even as the rate of price rises slows."
Henry Woodcock, principal mortgage consultant at IRESS, commented: “The trend developing so far this year is one of a slowing mortgage market, so this 11% decrease in lending compared to March is no great surprise to me.
"Lending in the buy-to-let market is down 80% over the year since the stamp duty hike in March 2016 as landlords have viewed the tax changes imposed under the new rules as ‘penalties’.
"However, we must keep in mind that all things are relative and the market has been in rude health for quite some time now so a slowdown is not altogether unexpected. There are plenty of buying opportunities at the moment with a Bank of England rate rise unlikely to happen before 2019. It’s now 10 years since the last rate rise, and this low interest rate environment has boosted remortgage activity and stimulated fierce competition between lenders, with house buyers now able to secure some great deals.
"I don’t think the general election itself is likely to have any significant effect on the market either way. I expect it to remain relatively steady for the foreseeable future.”
Richard Pike, sales and marketing director at Phoebus Software, added: “This is the second lowest figure for gross mortgage lending in 2017 to date. It is difficult to say with any certainty the reasons behind the drop from March, especially when you consider that the mortgages that went through in April were probably three months in the pipeline.
“So looking back to January there were no specific events to pin a theory to. It is most likely that supply, which has long been a problem, was a contributing factor. This will continue to be the case until our government, whichever party that may be, puts a sustainable plan that works for all levels of society into action.”
