An annual fall in home mover lending figures highlights the negative impact the Land & Buildings Transaction Tax is having on potential home buyers, according to industry body Homes for Scotland.

Statistics released yesterday by the Council of Mortgage of Lenders (CML) revealed that the amount borrowed by home buyers stood at £1.8 billion in the first quarter of 2017, down 15% quarter-on-quarter and 5% year-on-year.

The 14,300 loans awarded during the period was down 14% compared to the previous quarter and 6% on the first quarter 2016.

Likewise, the £1bn borrowed by Scots looking to move home was down 19% quarter-on-quarter and 6% compared to a year ago. This totalled 6,700 loans, down 19% quarter-on-quarter and 8% compared to the same quarter in 2016.

While the £810 million borrowed by first-time buyers was down 10% on the fourth quarter, the figure was up 25% on the first quarter last year. This totalled 7,600 loans, down 8% quarter-on-quarter but up 23% year-on-year.

Nicola Barclay, chief executive of Homes for Scotland, which represents the country’s housebuilders, said: “Whilst it is great to see first-time buyer activity up around a quarter on the same period last year, today’s figures also highlight an annual fall for home mover lending which raises concerns given the need for a healthy housing market across all segments.

“This would appear to underline our concerns regarding the impact of the Land & Buildings Transaction Tax with feedback from our members continuing to suggest that potential buyers of homes in higher bands are deferring the decision to move because of the additional sums payable compared to the old Stamp Duty system. We will continue to monitor this market activity and share any ongoing concerns with the Scottish Government.”

Carol Anderson, CML Scotland chair, added: “There tends to be a seasonal lull in lending in the first quarter of the year, and this year is no exception. Even so, competitive mortgage rates have spurred on a resurgence in remortgage activity which was at a five year quarterly high in Scotland. First-time buyer lending also showed an increase on the first quarter of last year.

“The decline in home mover activity is not unexpected given the surge in activity last year to avoid the changes in Land and Buildings Transaction Tax, but we expect home buying activity to gain momentum into the summer months.”