Mortgage lending in the UK’s buy-to-let sector has halved since the stamp duty surcharge was introduced on 01 April 2016, according to the Council of Mortgage Lenders (CML).
In the year since the introduction of the surcharge, there were approximately 71,100 loans granted for house purchases by landlords. However, in the previous 12 months there had been around 142,100 loans granted.
The 3 per cent surcharge applies to landlords who already own another property. In addition to this, there have been reductions in the amount of tax relief landlords can claim, and they must pay more income tax on their buy-to-let earnings, making the buy-to-let market a less appealing option for many.
The CML’s monthly report revealed that buy-to-let mortgages worth a total of £900m had been granted in March, down a staggering 79.5 per cent on the £4.4bn-worth of mortgages that had been granted in March 2016.
It is the first set of figures to cover the first full 12 months since the introduction of the surcharge, and while they show a fall in buy-to-let lending, the data shows that first-time buyer mortgages have been rising.
There was a 13 per cent rise in remortgaging activity in March compared to February, and a 22 per cent rise compared to the same period in 2016.
Paul Smee, director general of the CML, said: “As we head into the summer, both first-time buyer and remortgage lending [are] expected to maintain momentum in the light of the very attractive deals currently available.”