Mortgage approvals have hit their lowest level since the height of the Eurozone crisis, according to the Bank of England.
Mortgage loans totaled just £281m in April, their lowest level since August 2012, after the hike in stamp duty came into effect at the beginning of the month and buy to let landlords fled the market.
The figure compares to £7.41bn in mortgage loans that were approved in March. The number of approvals fell month-on-month from 70,305 to 66,250, lower than the 67,900 economists had expected.
Lending dropped to its lowest level since the end of 2015, dipping to £1.29bn in April.
Chancellor George Osborne announced the hike in stamp duty for people buying second homes in the Budget last year, in an attempt to help young people get onto the property ladder.
Richard Sexton, director of chartered surveyor e.surv, said: "After an extraordinary lift earlier this year, April saw house purchase approvals drop slightly as activity in the lending market settled down.
"This natural slowdown follows the flurry in buy-to-let activity following April’s stamp duty deadline, but June’s referendum could also be causing temporary caution. Remortgaging remains strong however, with lenders offering a variety of new and increasingly flexible mortgage rates for existing homeowners.
"And it’s not just the remortgaging sector with a spring in its step. Overall house purchase approvals may be down, but first-time buyers are still very much in the game."