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Stamp duty holiday prompts rush to buy

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The Council of Mortgage Lenders has released new data showing a 90% increase in the number of mortgage loans between December 2008 and December 2009.

The number of loans to first-time buyers also hit a two-year high in December, driven by a rush to buy properties in the £125,000 - £175,000 bracket before the 1% stamp duty holiday expired.

The number of loans to first-time buyers increased to 24,900 in December, up from 19,300 in November - this is the highest number since November 2007. 

55% of house purchase loans were on properties costing under £175,000 (and thus exempt from stamp duty), up from 51% in November.

Moreover, 10,300 first-time buyers bought a property in the £125,000 -£175,000 bracket in December, up 63% from 6,300 in November; 11,200 other transactions occurred in this range, up 49% or 7,500 on the previous month.

The Council of Mortgage Lenders say this data clearly indicates a rush to complete purchases before the end of the stamp duty holiday (and thus avoid paying an additional 1% of the purchase price on top of transaction costs).

Number of loans for house purchase (HP) and remortgage (REM)

 

Number of HP loans

Value of HP loans (£m)

Number of REM loans

Value of REM loans (£m)

December
2009

62,800

8,500

28,000

3,400

Change from November
2009

+23%

+20%

no change

-3%

Change from
December 2008

+90%

+93%

-32%

-40%

 

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