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CML Reports Large Drop in April Mortgage Approvals

Fri, 15 Jun 2012
Lending for house purchases saw a significant fall in April following a surge of activity in March.

According to new data from the Council of (CML), mortgage approvals dropped by 30 per cent month-on-month to just 36,000, with first time buyers the most affected following the ending of the stamp duty holiday in March.

The number of loans advanced to FTBs in April declined by 48 per cent on the previous month and 12 per cent on the same period in 2011 to just 12,600. By value, first time buyers borrowed £1.5 billion, down 52 per cent from March and 12 per cent compared to April last year.

The figures show that lending to home movers also fell. Some 23,400 loans worth £3.8 billion were taken out in April, 15 per cent less than the previous month but 3 per cent more compared to April 2011.

Paul Smee, CML director general, 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 per cent of people still aspire eventually to own their own homes, and long term demand clearly still exists."

David Newnes, director of LSL Property Services, added: "First time buyer activity is a critical starting point for the market as it allows those who wish to make purchases of higher value to move up the property chain."

"By stalling this part of the market, the return of stamp duty has brought an unnecessary and unwelcome distortion to the market."
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