Buy-to-let lending for house purchase plunged by 85% month-on-month in April as a stamp duty hike took effect, banks and building societies have reported.
The Council of Mortgage Lenders (CML) said 4,200 loans were handed out in April to those purchasing buy-to-let properties – marking a 85.4% fall compared with the 28,700 loans advanced for this purpose in March.
These loans were collectively worth £600 million in April – shrinking back by 86% compared with the £4.3 billion-worth of loans handed out in March for buy-to-let house purchase.
Buy-to-let lending for house purchase was also running at around half the levels seen in April 2015.
On April 1, a three percentage point stamp duty increase was introduced in England, Wales and Northern Ireland for people buying second homes, including buy-to-let investors. Stamp duty has been abolished in Scotland but a similar tax hike took place there to mirror the changes in the rest of the UK.