Surge of activity in mortgage market in March

CML figures released last week showed that there was a surge in activity in March.  The largest increase was in lending to first time buyers, as they rushed to beat the stamp duty holiday.  First time buyers took out 24,000 loans in March, with a value of £3 billion.  
The amount of loans taken out by first time buyers in March increased by 74% from February, and represented an annual rise of 57%.  
The value of loans taken out by first time buyers in March increased by 67% compared to March 2011, and rose by 76% compared to February 2011.
First time buyers took out 42% of all house purchase loans in March.  This is the highest proportion since 2001.  63% bought a property valued between £125,000 and £250,000, and so benefitted from the stamp duty holiday.  
As a result of the increase in first time buyers, there was a knock-on effect on other house purchasers.  27,200 loans with a value of £4.3 billion were taken out by home movers in March.  This is a 25% monthly increase in the number and a 19% monthly rise in the value of loans.  It also represents a 15% annual increase in the number and a 10% annual increase in the value of loans.
CML director general Paul Smee said:
"We expected this significant increase in borrowing for March because of the stamp duty holiday. However, if lending follows the same pattern as after previous stamp duty concessions, we will likely see a drop in activity in the next few months. It will take some time before we can judge whether other initiatives such as the NewBuy scheme and the reinvigorated right to buy will compensate for this effect."
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