Number of first time buyers up in rush to beat stamp duty deadline

The Momentum UK Team 13 February 2012

The number of mortgages agreed for first time buyers was up by 7% in December according to latest figures from the Council of Mortgage Lenders (CML).

December 2011 saw a 7% volume increase in lending to first-times buyers when compared with Novemeber figures, and a 14% increase in volume when compared with December 2010. The CML suggested that the leap could be due to first time buyers seeking to beat the stamp duty concession deadline late in March.

First-time buyers are currently exempt from stamp duty land tax obligations on properties over £125,000 and up to £250,000, a concession that will be withdrawn on transactions made after March 24 2012.

From March 2012 stamp duty rates will vary between 1-5% of the price of the property. All buyers will have to pay the equivalent to at least 1% of the value of their property if  they pay in excess of £125,000.

The CML also reported that lending to movers dropped from 29,300 in November to 28,700 in December, but the housing market remained largely unchanged across the two months.

Paul Smee, director general at CML said in a statement:

"We have been expecting a flow of first-time buyers on to the market, as the stamp duty exemption ends in March, and December's figures appear to show this has now begun,"

"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."