Mortgage borrowing fell sharply after a stamp-duty concession for first-time buyers was withdrawn, according to lenders.
The number of loans to home buyers fell by 30% month-on-month in April to 36,000 loans worth £5.3 billion, the Council of Mortgage Lenders (CML) said.
A total of 12,600 loans worth £1.5 billion were advanced to first-time buyers in April, around half the number recorded in the previous month, when buyers rushed to complete deals before the two-year concession ended, the CML found.
The body warned that a significant pick-up in purchases is unlikely in the coming months due to the uncertain economy.
The drop in first-time buyer activity was seen mainly among homes worth between £125,000 and £250,000, which would have been exempt from stamp duty until March.
Purchases of homes in this bracket plummeted by 70% month-on-month in April while sales of homes valued at up to £125,000, which are not subject to stamp duty, fell by a more modest 11%.
First-time buyer purchases of homes worth more than £250,000, which had not been eligible for the concession, also fell more gently, by 5%.
The stamp-duty concession was introduced by the previous government to stimulate the market and estate agents reported a flurry of activity from people trying to beat the deadline before the scheme ended on March 24.
The Government has introduced the NewBuy Guarantee scheme, which it hopes will kick-start activity by helping people to buy new-build homes with just a fraction of the usual deposit.
CML director general Paul Smee said: "April's figures show the expected effect of the end of the stamp-duty concession on UK mortgage lending. Given the economic uncertainty, any significant pick-up in lending in the coming months seems unlikely."
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