CML expect 10,000 fewer transactions in April May and June because of SDLT reforms.
The Council for Mortgage Lenders say they expect to see 10,000 fewer mortgage transactions per months in the first quarter of the new tax year, following the pre-stamp duty increase rush on second homes.
Analysis from the CML says the introduction of the 3% surcharge stamp duty on second homes this month resulted in up to five billion worth of extra lending, representing around 30-35,000 more transactions.
CML economist Mohammad Jamei said: “Against a backdrop of a recovering market, the substantial jump in lending in March was significantly influenced by a late surge of activity to beat the government’s stamp duty change on second properties, which came into effect at the start of April. The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we’ve seen.
“As a result, we expect there will be about 10,000 fewer mortgaged transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March.
“The underlying picture in the UK housing market is still showing signs of growth, as the market continues to be underpinned by strong fundamentals, with a growing economy, falling unemployment, and real wage growth enforced by government schemes and competitive mortgage deals.
“Part of this recovery in activity and transactions has been down to the strong pick-up in the buy-to-let sector, but more recently the owner-occupier sector has been recovering alongside buy-to-let and continues to be up on a year ago. Over the last few months, the driving force behind the increase in total lending had been remortgage activity.
“This has led to growth in monthly housing transaction volumes, which have been above 100,000 for nine months now, though activity still remains much lower than pre-crisis levels.”