The Council of Mortgage Lenders (CML) revealed on a monthly basis the value of lending rose 87% highlighting how close to the deadline of 1 April many investors had left purchasing buy-to-let properties before the onset of the 3% surcharge.
In transaction terms, 45,000 loans were taken out by landlords in total, up 88% compared to February and up 142% compared to March 2015.
Homeowner borrowing rose 59% in March compared to the previous month as lenders released £13.8bn for house purchases.
Year-on-year, this represented a 60% uplift in house purchases in March. Transaction levels were similarly strong as the 69,800 loans advanced were 45% higher than February and 38% up on March 2015.
David Catt, chief operating officer at Hometrack, said: “Following the boom in borrowing from homeowners and landlords in March, attention now turns to deciphering what impact April’s Stamp Duty hike and the impending EU Referendum will have on the market in the short to medium-term. Investor demand will likely plateau in the next couple of months as private investors consolidate their portfolios and adjust to tighter lending criteria.”
Home mover activity shot ahead of first-buyer transactions on both monthly and yearly measures.
Home movers borrowed £9.3bn, up 75% on February and 82% compared to a year ago. This totaled 41,700 loans, up 60% month-on-month and 58% on March 2015.
First-time buyers took out £4.5bn of mortgage lending, up 32% on February and 29% on March last year. This pushed volumes up by 28% month-on-month to 28,100, which represented a 17% annual increase.
Catt said homeowners would also be taking a more cautious approach to purchasing decisions and will probably want to know the outcome of the Brexit vote before increasing their borrowing.
“Looking further ahead, if the UK was to leave the Europe Union, the greatest impact would be on market sentiment which would have immediate impact on housing turnover and a knock-on effect on mortgage lending,” added Catt.
“Furthermore, it would create a prolonged period of uncertainty leading to reduced levels of demand which, considering the tight supply of housing in the UK, could feed quickly into house prices and result in a major slowdown in the rate of growth.”