UK mortgage lending slows sharply in April

UK mortgage lending in April slowed to its lowest monthly level since August 2012, according to the latest figures from the Bank of England.

Mortgage lending increased £281m compared with a £7.41bn rise in March, missing expectations of £3.8bn. The March figures were boosted by the fact that buyers were rushing to complete to beat the stamp duty hike that came into effect in April, whereby anyone buying an additional property has to pay an extra 3% stamp duty.

Meanwhile, approvals for new mortgages fell to 66,250 in April from 70,305 the previous month. Economists had been expecting a smaller drop to 67,950.

Lending to consumers expanded by £1.3bn, marking the weakest monthly change since December 2015 and missing expectations for a £1.6bn increase.

Howard Archer, chief European and UK economist at IHS Global Insight, said: “The strong suspicion is that housing market activity will be pressurised in the immediate term by a combination of weakened interest from the buy-to-let and second home sectors as well as heightened concerns and uncertainties over the UK economic outlook, particularly in the run-up to June’s referendum on EU membership.”