Mortgage lending at six-month high

Mortgage lending reached a six-month high in March (PA)

A rush to beat the deadline on the stamp duty concession drove mortgage lending to a six-month high in March, the Council of Mortgage Lenders (CML) said today.

Gross mortgage lending was around £13.4 billion, the CML said, representing a 30% rise from £10.3 billion in February and a 17% increase from March last year.

The concession on stamp duty - which meant first-time buyers were free from the 1% stamp duty on homes costing under £250,000 - ended on March 24.

A NewBuy scheme was introduced by the Government, in which lenders and the Government underwrite a mortgage secured on a new-build house or flat.

CML chief economist Bob Pannell said: "The underlying picture for house purchase activity has been relatively buoyant in recent months.

"However, we would be surprised if we did not see a drop in transactions over the next few months, following the end of the stamp duty concession, especially as it will take some while for NewBuy transaction levels to build."

The CML, whose members consist of banks, building societies and other lenders who together undertake about 95% of all residential mortgage lending in the UK, said gross lending for the first quarter of this year was around £34.4 billion.

This marks a drop from £37.8 billion in the previous quarter but a 13% increase on the first three months of 2011, the CML added.

PA