First Time Buyers Retreat at End of Stamp Duty Holiday
First time buyers retreated at the end of the stamp duty holiday. It had been in effect for two years but when the expiration date of March 24 neared it brought out enough first time buyers to give the housing market a boost. Many starter homes were purchased which allowed homeowners to seek out upgrades and the entire property ladder had movement again. Even though the boost occurred the stamp duty holiday was not viewed as successful and the government allowed it to expire.
In a year to year comparison of April figures there was both a decline in the number of loans overall as well as value by 3%. The Council of Mortgage Lenders (CML) revealed that there had been a 70% decline in the number of loans to purchase property from March to April in the grouping of £125,000 and £250,000 priced properties. The stamp duty holiday had offered a 1% savings for first time buyers that purchased properties up to £250,000. There was a 48% decline in the number of loans to first time buyers between March and April. The value decline for first time buyers fell by 52%. There was a 15% decline overall for new purchase mortgages and the value level overall fell by 14%.
Paul Smee, director general of CML, said, “April's figures show the expected effect of the end of the stamp duty concession on UK mortgage lending. Given the economic uncertainty, any significant pick up in lending in the coming months seems unlikely.”