CML: Third of first-time-buyers escaped stamp duty

One third of first-time-buyers escaped stamp duty in September as a result of the government's "holiday" on the tax, according to the Council of Mortgage Lenders (CML).

Under the temporary tax rule, properties under £175,000 are exempt from stamp duty.

The latest CML figures show that during September, 6,200 mortgages were taken out by first-time-buyers purchasing properties priced between the old £125,000 threshold and the new temporary figure.

This represented 32 per cent of the 19,700 total mortgages taken out by first-time-buyers during the month.

The figures also reflected a fall in house prices as 40 per cent of first-time-buyer mortgages were for properties priced under £125,000.

CML economist Paul Samter said the stamp duty concession had played a modest role in underpinning confidence in the housing market but warned the end of the concession could mean a poor start to 2010.

"As the end date for the stamp duty concession approaches, we may see sustained levels of activity at the lower end of the market in a traditionally quiet time," he said.

"But the corollary will be lower activity in early 2010 as transactions are bunched in 2009. Although the recent bounce-back in house purchase activity is holding up, we remain some way below what might be called normal levels of transactions."

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