March 2016 saw a record high in mortgage borrowing since 2008. Gross borrowing in the month totalled £17.1 billion, up from £13.2 billion in February which was also a higher than usual total.
The increase has mainly been attributed to the stamp duty increases that came into force on 1st of April for buy-to-let investors.
Investors have been rushing over the last few months to get their purchases completed in order to avoid the 3% hike that has now come into force. Residential Landlord stated that “the average amount borrowed for a purchase was £184,200 last month, up from £167,700 a year earlier. A £3,300 jump was also seen in comparison to February”.
Mortgage lenders have said they are expecting a much quieter month in April, however this could be an opportune time for buy-to-let landlords or first time buyers to get a great deal in a softening market. Mortgage rates are at historically low levels at the moment which buyers can take advantage of. Furthermore with a lot less people looking to buy it puts potential buyers in a very strong position, meaning lenders will be fighting for their business with even better deals that we’ve seen so far this year. According to the Mortgage Advice Bureau (MAB) mortgages are getting a lot cheaper with three year and five year fixed mortgage rates currently at record lows. There are now 18,653 mortgage products on the markets which is up almost 1,000 since February, which gives much more choice and power to the consumer. The reduced rates may not be profitable for the lenders in the short-term, however getting new business and increasing the share of the market they control can be beneficial for them in the future, so it is potentially a win-win for both.
For any further information or advice, or info on who to contact regarding a mortgage, feel free to contact one of our offices today.