Council of Mortgage Lender data clearly showed the distorting effect of the end of the Stamp Duty holiday as properties valued at £125,000 or below fell by a more modest 11% and those over £250,000 fell by 5%.
In total, 12,600 loans were advanced to first-time buyers, a drop of 48% against March and 12% compared to April 2011.
By value, first-time buyer borrowing at £1.5bn is down 52% on March and 12% compared to April last year.
Buyers also gravitated toward cheaper properties and stretching incomes less, as the average loan amount fell from £117,000 in March to £98,000 in April.
Paul Hunt, managing director, Phoebus said lenders are displaying a greater willingness to lend and using innovation to push mortgage advances up 5.6% in the last year.
“The industry must hope the underlying demand for property purchases means aspiring first time buyers will continue to save to overcome the larger fiscal hurdles the government has put in their way”.
Lending to home movers also fell in April with 23,400 loans worth £3.8bn taken out, a fall of 15% from the previous month, but still marginally up on the year.
Total house purchase lending in April fell from 51,600 loans, worth £7.4bn, in March to 36,000, worth £5.3 bn, in April.
Remortgaging also saw a fall, with £3.1bn advanced, down 14% compared with March and the lowest monthly total since December 2010.
An overwhelming 98% of first-time buyers took repayment mortgages out in April, with 85% of home movers and 82% of remortgagors doing the same.
In April, first-time buyers spent 19.1% of their income on both capital and payments, down from 19.8% in March.
Paul Smee, director general of CML, (pictured) said: “April’s figures show the expected effect of the end of the Stamp Duty concession on UK mortgage lending. Given the economic uncertainty, any significant pick up in lending in the coming months seems unlikely.
“However, our recent research highlights that over 80% of people still aspire eventually to own their own homes, and long term demand clearly still exists.”
Jonathan Samuels, CEO of Dragonfly Property Finance, said: “The April figures were expected to go off a cliff after the end of the stamp duty holiday and they didn’t disappoint.
“The only area of the mainstream mortgage market that has any real life in it is buy-to-let. With inflation still high and returns on deposit so low, a growing number of people are looking for real returns in buy-to-let.”
