Mortgage lending fell back by nearly a third in April as a stamp duty hike for buy-to-let investors came into force, lenders have reported.
The Council of Mortgage Lenders (CML) estimates that gross mortgage lending reached £18.5 billion in April. This was 29% or £7.7 billion lower than March's lending total of £26.2 billion.
With buy-to-let investors now taking more of a "back seat" in the housing market, first-time buyers and home movers are expected to be driving the market in the coming months.
On April 1, a three percentage point stamp duty increase was imposed for people buying second homes, such as buy-to-let investors. Stamp duty has been abolished in Scotland, but similar tax increases took place there to mirror the stamp duty changes in the rest of the UK.
Estate agents reported dealing with a bottleneck of investors rushing to beat the hike before April 1 and many investors will have brought forward property purchases that would otherwise have taken place later in the year.
While April's mortgage figure is down compared with March, it is still 16% higher than the £16 billion lent in April 2015, the CML said.
It is also the highest lending total for the month of April since 2008, when £25.3 billion-worth of loans were handed out.
CML economist Mohammad Jamei said: "As we move past the stamp duty change that came into effect at the start of April, we expect to see a quieter second quarter as some transactions that were due to take place were brought forward to the first quarter of this year. This is likely to mean that over the next few months buy-to-let takes a back seat as lending is driven by first-time buyers, movers and remortgage customers.
"The underlying picture still shows signs of growth, as the market remains underpinned by strong fundamentals such as increasing wages and rising employment. But it is possible that the uncertainty around the upcoming EU referendum in June will weigh on activity in the upcoming months."
A separate report based on projections from the Centre for Economics and Business Research (Cebr) has found that whether the country decides to leave the EU or not on June 23, property prices are expected to keep climbing upwards.
The report, compiled for the National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (Arla), suggested that if there is a Brexit vote, the average UK house price will be around £2,000 cheaper by 2018 than it would be if there is a vote to stay. It expected house prices to increase more gently in the event of a Brexit.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "There are potential hiccups on the horizon which may foster uncertainty, such as the EU referendum, but for many people life will go on and it will be business as usual.
"The challenger banks are keen to lend, while more established lenders also wish to bring in more business, which will be reflected in cheap rates and some tweaking of criteria."