The number of homeowners borrowing money for house purchases went down in April following Stamp Duty changes
According to research by the Council For Mortgage Lenders £8.1billion was lent to homeowners a drop of 40% on March and 4% less than April 2015.
Buyers of second homes took out 47,300 loans during April, which was down 31% from the month previous and added up to an annual dip of 5%.
The council’s director general Paul Smee said: “There is a sense of calm after the storm this month, as lending eased back, following the significant rises in activity in March as borrowers looked to beat the second property Stamp Duty deadline.
“We expect the market to take several months to return to its previous levels after the lending surge.”
The higher rate of Stamp Duty made it more expensive for those looking to buy second homes.
For a property worth £530,000, around the average cost of a home in London, investors would need to find £32,400 in tax.
The aim of the duty was to reduce the competition between buy-to-let landlords and first-time buyers in the starter home market.
The council’s research showed that those making their first purchase borrowed £3.9billion in April, which was down 11% on March but up 15% on April last year.
Haart estate agency CEO Paul Smith said the data demonstrated the uncertainty around the EU Referendum and the impact it was having on the market.
He said: “This data correlates with our own, which shows buyer demand declined 5% on the month in May across the UK and transactions fell 3.9% over the same time period.
“While mortgage rates are currently at an all-time low and therefore very attractive to buyers, the exaggerated figures reported by the remain campaign as to what could happen in the event of a Brexit are causing jitters in the market, putting people off making decisions until after the result.
“However, regardless of which way the vote goes, the market is fundamentally robust and will return to its position as a pillar of strength once buyers know where the future of the UK lies.”