Mortgage lending slumped to a 10 year low as the stamp duty holiday ended
Figures released last week show that mortgage lending slumped to a 10 year low during January following the end of Labour’s stamp duty “holiday”.
According to the Council of Mortgage Lenders (CML) www.cml.org.uk total mortgage advances were down 32% to £9.1 billion during January, the lowest level since February 2000.
The CML said that house hunters put moving plans on hold over Christmas which shows in the typical fall-off of lending in January. They went on to say that this year’s drop was larger than usual and could be attributed to buyers buying lower-value property in an attempt to rush through their purchase before the stamp duty holiday ended.
The CML reported that the lending figure for December was “surprisingly strong” with a 14% jump in mortgage advances.
They commented that the rise was due to the increased demand of people purchasing properties of values up to £175,000 and trying to complete their purchase before the stamp duty threshold reverted back to £125,000 at the start of the year.
Of the total number of homes purchased in December, 55% cost less than £175,000 with 10,300 first time buyers purchasing property of between £125,000 and £175,000, this was a rise of 63% on the November figures.
The CML did warn that the rush to purchase property during the stamp duty holiday in the last few months of 2009 was likely to lead to a drop in sales during the early part of 2010.