Half Of Borrowers Avoid Stamp Duty In September

The temporary increase in the stamp duty threshold saw 51% of homebuyers avoiding stamp duty in September, compared with 22% in September last year. However, the number of house purchase loans was 57% lower than September 2007, according to new data from the Council of Mortgage Lenders (CML).

There were 35,000 loans for house purchase worth £5 billion in September, down 15% in volume and 15% in value from August, and less than half September 2007 levels.

There were 62,000 loans for remortgage worth £8.5 billion in September, down 15% in volume and 16% in value from August, but still around two thirds of September 2007 levels.


First-time buyers in September borrowed an average of £104,500, down from £108,000 in August. The amount borrowed has been steadily declining since peaking at £119,250 in July 2007. This has brought the average first-time buyer income multiple down to 3.18, its lowest level since March 2006.

CML Director General, Michael Coogan, said: "While house purchase activity has reached exceptionally low levels, it is encouraging to see transaction costs lowered for a larger proportion of borrowers. The government should consider what other measures can be brought forward to enable the market to transact more easily.

"Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk. If the pricing and volume of interbank lending continues to improve, this should help the flow of mortgage lending."

(CD/JM)