Building societies lent £7.3m in mortgages in March 2016, up from the £5m seen in February, with lending 40% higher during the first three months compared with the same period last year.
Overall, building societies approved 109,600 mortgages in the first quarter of the year, representing a 32% share of the 347,000 mortgage loans approved across the market in the period.
Gross mortgage lending by building societies from the beginning of January to March-end was £17.7bn, accounting for 28% of the £62.5bn total lending for that period.
Paul Broadhead, head of mortgage policy for the Building Society Association (BSA), said activity was “fuelled” by a surge in prices ahead of the 1 April deadline.
Building societies accounted for nearly half of net lending in the first quarter of the year, approving 29% of all mortgage loans. Household savings held at building societies stood at £4.3bn for the first quarter of the year, a 23% share of the £19bn market and up from £12bn in the first quarter.
The average mortgage rate offered by building societies in the period was 2.88%, lower than the market average of 2.94%.
Broadhead added: “While it is not currently possible to explain the reason for this significant inflow, it does correlate with the surge in property transactions during March.
“It is therefore possible that some property sales were pushed through before the increase in Stamp Duty on second homes, with sellers opting to deposit the cash from their sale rather than delaying the process by looking for a property to purchase, which could have put the transaction at risk of falling through.”
He said much of the additional increase in savings seen in March could be withdrawn over coming months as people withdraw this money to fund property purchases.
