The decline in new lending marked April out as the slowest month for gross mortgage lending since November when mortgage lenders advanced £23.3bn in home loans.
Mortgage approvals continued to climb, however. House purchase approvals totalled 86,900 for the month, against 83,400 in March. This compared to the recent peak of 103,400 in November. Pre-pandemic, in February 2020, mortgage approvals for house purchases totalled 73,400.
Nitesh Patel, strategic economist at Yorkshire Building Society, said: “An accurate measure of market conditions and activity is the volume of mortgage approvals, and this figure was a slight increase on March. This demonstrates that buyers were keen to push through higher value transactions ahead of the stamp duty deadline, to ensure they could benefit from the discount. The rush to beat the June deadline continues to fuel demand and we expect June to be another big month, but after that we expect the market to cool as the tax relief is reduced from £500,000 to £250,000.
“This is likely to impact demand in high value areas such as the South East. Further slowdown in activity is expected when the tax saving is removed altogether at the end of September,” Patel said.
Net mortgage borrowing also fell back in April to £3.3bn, from a high of £11.5bn in March.
The figure was also down on the £5.7bn six monthly monthly to February 2021.
Joshua Elash, director at property lender MT Finance, added: “While net mortgage borrowing was down this month, it is likely that this can be accounted for by the surge in borrowing the previous month by buyers in a mad rush to beat the now-extended stamp duty deadline. We expect these figures to edge up again next month.
“The extraordinary level of liquidity in the economy continues to drive households and businesses alike to repay debt with significant net repayments on consumer credit particularly noteworthy,” Elash said.
Net repayments of consumer credit totalled £0.4bn in April. The monthly average seen over the past year however was £1.7bn.