Loans up as stamp duty amnesty ends

A scramble to get on the property ladder before the end of a duty concession has sparked a 7% jump in loans (PA)

A scramble to get on the property ladder before the end of a duty concession has sparked a 7% jump in loans to first-time buyers, lenders said today.

The withdrawal of the two-year amnesty on stamp duty for first-time buyers purchasing homes worth between £125,000 and £250,000 happens on March 24, fuelling expectations of a rush of purchases before then.

The Council of Mortgage Lenders (CML) said this appeared to be the case after figures today showed its members advanced 18,700 loans worth £2.3 billion to potential new homeowners in December, up 7% and 10% respectively on November.

The overall number of loans for home purchase was 2% lower on the previous month at 28,700, but the CML said there was an increase in overall lending last year for the first time since 2007, when the financial crisis struck.

CML director-general Paul Smee said: "With the eurozone problems still rumbling on, however, we believe there is still a risk that this year's lending levels will be lower than those seen in 2011."

There were 193,000 loans worth £23.4 billion taken out by first-time buyers last year, down 4% by volume and 2% by value.

However, Mr Smee added: "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."

Movers took out 316,500 loans worth £51.4 billion last year - a fall of 8% by volume and 7% by value.

PA