UK housing market is in neutral gear, say lenders
The UK's housing market is in "neutral gear" and the general election will do little to change that, the mortgage lenders' trade body has said.
The Council of Mortgage Lenders (CML) said gross mortgage lending totalled £21.4bn in March, in line with the monthly average over the past year.
But it was much less than the £26.3bn lent in March last year, when there was a surge in buy-to-let borrowing.
Then, landlords rushed to buy homes ahead of a rise in stamp duty.
A 3% stamp duty surcharge was introduced in April 2016 on the purchase of any properties that are second homes.
Since that surcharge came in, the buy-to-let market has become more subdued, as has the market for home movers.
However the CML said this fall had been cancelled out by a pick-up in lending to first-time buyers.
"There has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords," said the CML's senior economist Mohammad Jamei.
'Pedal to the floor'
The number of first-time buyers has increased steadily since early 2013, the CML said.
In the 12 months to March this year, there were 342,000 first-time buyers, the highest figure for any 12-month period in the past nine years.
"For so long landlords have held all the cards but, with the various tax changes applied to buy-to-let, first-time buyers are firmly in the driving seat and are putting the pedal to the floor," said Mark Dyason, director of mortgage broker Edinburgh Mortgage Advice.
The uncertainty created by a general election has traditionally put a dampener on the housing market, but the CML said that might not be the case this time around.
Mr Jamei said: "We do not anticipate that the prime minister's decision to call a snap election will have a large impact on the housing market."
Howard Archer, chief UK economist at IHS Markit, said: "We expect house price gains over 2017 will be limited to no more than 2.5% - and it could very well be lower than that."