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Lending figures suggest UK first time buyers are racing to beat tax deadline

Its latest figures show that the number of first time buyers who are currently exempt from paying stamp duty on properties up to £250.000 increased in December. There were 18,700 loans advanced, worth £2.3 billion, up 7% by volume and 10% by value from November.

There was also an increase from 50% to 53% in the proportion of properties bought by first time buyers within the price band currently exempt from stamp duty, making it likely they are beginning to rush through purchases before the concession ends in March.
Lending to movers, however, experienced a seasonal decrease in December from 29,300, worth £4.8 billion in November to 28,700, worth £4.6 billion.

Overall, December saw an almost unchanged house purchase market from November. House purchasers took out 47,400 loans, worth £6.9 billion, a 1% increase in volume, with no change in the value, from the previous month and 7% up (8% in value) from December 2010.

The number of loans for remortgage, however, declined 15% (14% by value) from November but the 28,100 loans, worth £3.6 billion, taken out increased by 10% in volume (16% in value) from December 2010 following a low period for remortgaging.

It was a mixed picture for the mortgage market in 2011 as a whole. Remortgage lending increased by 17% from 2010 to £47 billion, while house purchase lending, at £75 billion, was 6% down on the previous year.
Within the house purchase market, lending to both first time buyers and movers fell in 2011 but first time buyers fared slightly better. There were 193,000 loans, worth £23.4 billion, taken out by first time buyers in 2011, down from 200,100 loans, worth £23.9 billion in 2010, a 4% fall by volume and 2% by value.
Movers took out 316,500 loans, worth £51.4 billion, last year, down from 343,200, worth £55.1 billion, in 2010 (down 8% by volume, 7% by value).
‘We have been expecting a flow of first time buyers onto the market as the stamp duty exemption ends in March and December’s figures appear to show this has now begun,’ said Paul Smee, CML director general.

‘The market in 2011, while still subdued, saw a welcome increase in annual gross lending for the first time since 2007, when the financial crisis began. With the eurozone problems still rumbling on however, we believe there is still a real risk that this year's lending levels will be lower than those seen in 2011,’ he added.