There was a small increase in lending to first-time buyers in March compared to a year earlier, while remortgaging levels softened slightly after a busy start to the year, according to UK Finance’s latest Mortgage Trends Update.

Separate figures from the Bank of England show that gross mortgage lending in the first quarter of 2018 was £61.1 billion, up 3.4% from £59.0 billion in the first quarter of 2017.

There was £5.1bn of new lending to first-time buyers in the month, up 2% year-on-year. 31,200 new first-time buyer mortgages were completed in the month, some 1.9% fewer than in the same month a year earlier. The average first-time buyer is 30 and has a gross household income of £42,000.

There was £6.1bn of new lending to homemovers in the month, 4.7% down year-on-year. There were 28,400 new homemover mortgages completed in the month, some 7.8% fewer than in the same month a year earlier. The average homemover is 39 and has a gross household income of £56,000.

The £5.6bn of remortgaging in the month was 9.7% down year-on-year. There were 32,400 new homeowner remortgages completed in the month, some 12% fewer than in the same month a year earlier.

There were 5,500 new buy-to-let home purchase mortgages completed in the month, some 19.1% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 20% down year-on-year. UK Finance research suggests the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes including the limiting of landlords’ Mortgage Interest Tax Relief (MITR), the 3% Stamp Duty Land Tax (SDLT) surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority (PRA).

There were 12,600 new buy-to-let remortgages completed in the month, some 0.8% more than in the same month a year earlier. By value this was £2.0bn of lending in the month, the same year-on-year.

Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging levels softened in March, after a busier than usual start to the year saw customers locking into attractive deals ahead of a potential interest rate rise.

“There has been relatively flat growth in lending to first-time buyers, reflecting recent Bank of England figures showing a fall in mortgage approvals.

“Meanwhile the buy-to-let market remains subdued, as recent tax and regulatory changes continue to have an impact on demand.”

John Eastgate, sales and marketing director at OneSavings Bank, said: “Buy to let lending has demonstrated some resilience despite the tax and regulatory interventions introduced in recent years. The purchase market was always most likely to bear the brunt of these changes, and today’s figures endorse that.

“Caution needs to be exercised by policymakers who can ill afford to further undermine a market that provides more than a fifth of all housing stock in the UK, and which contributes in excess of £15bn to the UK economy every year.  Despite these figures, it remains the case that buy to let is now a two speed market, with amateurs exiting and professionals picking up the slack.

“Buy to let is still a profitable investment, with our own research suggesting landlords could see a net profit of £162,000 per property over the next 25 years.”