Mortgages fillip as end of tax concession draws near

A SCRAMBLE to get on the property ladder before the end of a duty concession has sparked a 7 per cent jump in loans to first-time buyers, lenders have said.

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 24 March, fuelling expectations of a rush of purchases before that date.

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

The overall number of loans for home purchase was 2 per cent 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 £23.4bn taken out by first-time buyers last year, down 4 per cent by volume and 2 per cent by value.

Movers took out 316,500 loans worth £51.4bn last year – a fall of 8 per cent by volume and 7 per cent by value.

Meanwhile, the Royal Institute of Chartered Surveyors Scotland has announced that house sales rose slightly last month as an increased number of first-time buyers looked to make purchases before the stamp duty holiday comes to an end, according to a report.