First Time Buyer Mortgages Boosted By Stamp Duty Holiday

First time buyers rushed to arrange their mortgages to take advantage of the stamp duty holiday in December, according to the Council of Mortgage Lenders.

The Council of Mortgage Lenders (CML) is reporting that first time buyers were rushing to secure their mortgages to benefit from the stamp duty holiday in December. Properties in the £125,000 – £175,000 price bracket were exempt from stamp duty, however that concession expired on 31st December 2009.

24,900 first time buyer mortgages were arranged in December, the highest number since November 2007. A total of £2.9 billion was loaned to these borrowers, which was a 26% increase compared to November both by volume and value.

The stamp duty concession succeeded in attracting the interest of first time buyers as 51% of house purchases in December fell within the £125,000 and £175,000 price band, which clearly shows that these buyers were rushing to complete their purchases before stamp duty increased back to 1% in January for these homes.

Overall, however, the housing market during 2009 was subdued. There were 517,000 house purchase loans taken out last year, which is only slightly more than the 516,200 mortgages arranged in 2008. In contrast, the CML reports that there were 1,015,100 home purchase mortgages arranged at the height of the market in 2007.