Home buyers have had the opportunity to save on the stamp duty for two years now if they were first time buyers and the purchased property was under the cost of £250,000.  The stamp duty holiday was closing in on the deadline of March 24 and that spurred an increase in home buyers to purchase and take advantage of the savings.  According to the figures released by the Council of Mortgage Lenders (CML) there were almost 36,000 first time buyer loans in January which is an increase of 23 per cent.

This increase in home purchases came at a time when the demand for remortgages was declining.  There were 26,600 remortgages in January which was down from the previous month’s figure of 28,200.  There was a year on year decline of 5 per cent and when compared to January 2010 there was a decline of 13 per cent.  The decrease in remortgage demand is not expected to remain in the coming months.  Several lenders have given notice that they will be increasing their standard variable rate (SVR).  This is going to trigger homeowners that had been content to remain on their lender’s SVR after their current mortgage deal ended to obtain a remortgage.

The demand for home purchase mortgages is expected to decline after the stamp duty holiday ends.  Many are calling for an extension of the stamp duty to help stimulate purchase in the wake of lender’s announcing an increase in their lending offers.  Without any incentive to come out and purchase now instead of waiting few home buyers are expected when they will be facing an increase in borrowing.