Mortgage lenders reflect on stamp duty holiday trends
The Council of Mortgage Lenders has divulged the winners and losers from the stamp duty holiday as it nears its conclusion.
Home buyers in the north of England have benefitted most from the stamp duty holiday, the Council of Mortgage Lenders (CML) has suggested today (December 31st).The tax break, which was originally announced in September 2008, saw the nil rate threshold for stamp duty temporarily increased to £175,000.
As the holiday now nears its conclusion, the CML confirmed that the number of people who took advantage with their mortgages peaked at 57 per cent in the first quarter of 2009.
In the north of England, the number of exempt transactions was under half prior to the move, but this figure increased to over three quarters in the third quarter of the year.
By contrast, in London, the proportion of house purchases exempt from stamp duty increased to just 17 per cent, in comparison with two per cent before the holiday was introduced.
CML senior statistician James Tatch, who conducted the research, explained that the final cost in foregone revenue will be under £500 million, despite the Treasury's original prediction of £600 million.
"We may see some surge in activity at the end of the year as borrowers rush to beat the deadline on the stamp duty concession before it ends," he said.
"This may bring the total benefit to consumers nearer the government's original estimate, but there is no realistic chance of the government 'spending its budget' on this by the end of the year."
Earlier this month, the CML claimed that the number of Britons with mortgage arrears of 1.5 per cent of their overall balance or more fell from 2.8 per cent to 2.61 per cent in the third quarter of 2009.
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