The British Bankers’ Association (BBA) has found that gross mortgage borrowing of £12 billion in April 2016 was 12% higher than in April 2015.  

As expected, this was a slower month, following the inflated lending activity associated with borrowers completing purchases ahead of the stamp duty increase.

House purchase approval numbers have resumed a downward trend after seeing increased activity during the three previous months which were influenced by the stamp duty change. Numbers were 6% lower than in April 2015.

Dr Rebecca Harding, chief economic adviser at the BBA, said: “As expected, growth in mortgage lending has fallen back sharply on last month proving that March’s results were just a Stamp Duty spike. Net mortgage borrowing is nevertheless three per cent higher than a year ago.

“Separately, the fact that personal deposits are growing while ISA deposits continue to under-perform suggests consumers are using easy-access savings while the outlook for the economy remains uncertain. The increase in real wage growth may start to have positive  knock-on effects on long-term savings if it is sustained.”

David Whittaker, managing director of Mortgages for Business, added: “Changes to stamp duty led to a hugely busy first quarter for lenders, as landlords sought to beat the clock and save thousands of pounds. Mortgage lending in 2016 has been frontloaded as a result of this, and the second quarter will be quieter.

“A slight tapering off of lending in April reflects a less frenetic marketplace. Despite this fall, lending remains higher than a year ago, which illustrates that borrower appetite continues.

“Strong returns resulting from high demand for rental accommodation will keep buy-to-let activity strong. There is still plenty of profit to be made, but landlords must ensure that they factor additional stamp duty into their financial planning along with the looming tax relief change.”