Stamp duty holiday affects mortgage lending figures for January
March 18, 2010 by admin
Filed under News, News-Mortgages
It has been revealed in a recent report that the level of mortgage lending for the month of January has been badly affected by the end of the stamp duty holiday, which came to an end on 31st December last year.
With the government having given advanced warning of when the stamp duty suspension would come to an end many people tried to rush through property transactions in the latter part of 2009 and this has resulted in a deep lull in mortgage lending for January.
The suspension on stamp duty was brought in by the government to try and boost the flagging property market by boosting affordability for first time buyers and increasing property transactions.
Before the stamp duty holiday only people buying properties up to the value of £125,000 were exempt from paying stamp duty. However, as a result of the changes made by the government this was extended to properties up to the value of £175,000, which meant that the exemption threshold had been increased by £50,000.
With the opportunity to save money at their disposal many buyers seized the opportunity to purchase a property and make a saving of up to £1750 as a result of the stamp duty holiday.
However, as the end date for the scheme started to get nearer those that still wanted to take advantage of the scheme started pushing through their purchases to avoid missing the deadline of the end of the year, which meant that property transactions in the latter part of last year increased.
This led to a deeper than usual drop in mortgage activity for the month of January, with the Council of Mortgage Lenders reporting a 32 percent drop in mortgage lending compared to December of last year.
Tags: advanced warning, stamp duty, duty holiday, stamp, council of mortgage lenders, mortgage, mortgage lending, percent dropOne CML official said: “Recent developments have been influenced by the end of the stamp duty holiday, and are likely to foreshadow a larger than usual seasonal drop off in activity in the early part of this year.”
