House purchase lending in the UK surged by 60 per cent in March compared to a year ago, according to new figures from the Council of Mortgage Lenders (CML).
The data reveals that homeowners borrowed £13.8 billion for house purchases in March, which represented a 59 per cent month-on-month increase in addition to the 60 per cent year-on-year rise.
In total, 69,800 loans were taken out, which was up by 45 per cent compared to February and by 38 per cent in comparison to March 2015.
First-time buyers borrowed £4.5 billion, which was a 32 per cent monthly rise and up 29 per cent on March last year. This totalled 28,100 loans, which was up 28 per cent month-on-month and 17 per cent year-on-year.
Home movers borrowed £9.3 billion, which was up by 75 per cent on the month and by 82 per cent when compared to a year ago. This totalled 41,700 loans, which is an increase of 60 per cent month-on-month and by 58 per cent when compared with March 2015.
Overall, it is the highest amount of loans taken out in a monthly period for house purchase since June 2014 and, in terms of the amount borrowed, is the highest level since August 2007.
The activity was mainly driven by home mover activity, with the most amount of loans in a monthly period for home movers since November 2007 and the highest amount home movers have borrowed in a monthly period since August 2007.
The CML affordability metrics for first-time buyers remained relatively stable, with the amount borrowed increasing to £133,000 from £129,000 last month, but offset by the total household income of borrowers also increasing from £39,500 in February to £40,549 in March.
The amount of monthly gross income that first-time buyers are spending to service capital and interest repayments stands at 18 per cent, which is the lowest level since records began in 2005.
The amount that home movers are paying as a proportion of their income is also at a record low, sitting at 17.8 per cent, which is down from 18.1 per cent in February and 18.1 per cent in March last year, and far lower than the peak of 23.8 per cent recorded in December 2007.
Paul Smee, director general of the CML, noted that activity in March was reflective of a rush to beat the introduction of stamp duty changes for second properties in April.
He added: “This, alongside the seasonal uptick in activity before Easter, meant increases were substantial, but these supercharged levels of activity are likely to be temporary and will fall back over the summer months.”
It comes after the latest Halifax House Price Index indicated that the number of home sales being completed in the UK in March rose at a record rate to total more than 165,000.