First-time buyers take advantage of stamp duty concession

The number of first-time buyers, who are currently exempt from paying stamp duty on properties up to £250,000, increased in December, according to the Council of Mortgage Lenders.

There were 18,700 loans advanced, worth £2.3 billion, up 7% by volume and 10% by value, from November.

The number of properties bought by first-time buyers within the price band currently exempt from stamp duty also rose - from 50% to 53%. The CML says this is probably because first-time buyers are beginning to rush through purchases before the concession ends in March.

Lending to movers, however, experienced a seasonal decrease in December to 28,700, worth £4.6 billion, from 29,300, worth £4.8 billion in November.

House purchase

Overall, December saw an almost unchanged house purchase market from November. House purchasers took out 47,400 loans, worth £6.9 billion, a 1% increase in volume, with no change in the value, from the previous month and 7% up (8% in value) from December 2010.

Remortgaging

The number of loans for remortgage however declined 15% (14% by value) from November but the 28,100 loans, worth £3.6 billion, taken out increased by 10% in volume (16% in value) from December 2010 following a low period for remortgaging.

2011

It was a mixed picture for the mortgage market in 2011 as a whole. Remortgage lending increased by 17% from 2010 to £47 billion, while house purchase lending, at £75 billion, was 6% down on the previous year.

Within the house purchase market, lending to both first-time buyers and movers fell in 2011 but first-time buyers fared slightly better.

There were 193,000 loans, worth £23.4 billion, taken out by first-time buyers in 2011, down from 200,100 loans, worth £23.9 billion, in 2010- (a 4% fall by volume and 2% by value.

Movers took out 316,500 loans, worth £51.4 billion, last year, down from 343,200, worth £55.1 billion, in 2010 (down 8% by volume, 7% by value).

Comment

Paul Smee, CML director general, said: “We have been expecting a flow of first-time buyers onto the market as the stamp duty exemption ends in March; December’s figures appear to show this has now begun.

“The market in 2011, while still subdued, saw a welcome increase in annual gross lending for the first time since 2007, when the financial crisis began. With the Eurozone problems still rumbling on however, we believe there is still a real risk that this year's lending levels will be lower than those seen in 2011.”