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Gross mortgage lending in ‘neutral gear’

Gross mortgage lending held up relatively well last month despite a fall of almost 20% year-on-year, according to the latest estimate from the Council of Mortgage Lenders (CML).

The March lending total reached £21.4bn, down 19% on the £26.3bn lent in the same month last year, but was up 19% from £17.9bn in February 2017, the CML said.

The sharp decline in year-on-year lending was attributed to a surge in activity last March as buy-to-let investors rushed to complete deals ahead of the introduction of a 3% stamp duty surcharge on addition property acquisitions, including buy-to-let homes, at the start of April 2016.

Gross mortgage lending for the first quarter of 2017 was an estimated £59.1bn, down 4% on the final three months of last year and a 6% decline on the £63bn lent in Q1 2016.

Mohammad Jamei, senior economist at the CML, said: “Mortgage lending appears to be in neutral gear. Our gross estimate for March is £21.4bn and this is broadly in line with average monthly lending over the past year.

“Within this aggregate level, there has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.

“We expect this profile to continue over the short-term, as low mortgage rates encourage existing borrowers to remortgage and government schemes help first-time buyers. We do not expect any marked effect from the general election.”

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