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First time buyer activity hits three year high

First time buyer activity hits three year high

Category: Debt

Updated: 07/03/2012
First Published: 07/03/2012

MONEYFACTS ARCHIVE
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First-time buyers looking to beat the stamp duty deadline on March 24 have boosted activity levels to a three year high.

First-time buyers have just over two weeks to complete their mortgage deals, after which they will have to pay a 1% levy on deals worth between £125,000 and £250,000.

And figures from Connells suggest that many are taking the opportunity to buy their first homes.

The number of valuations for first-time buyers rose by 52% compared to February 2011, reaching the highest number since March 2009.

This represented a 56% increase in the number of valuations for first-time buyers compared to January. As a result, first-time buyer demand accounted for 35% of all valuations completed – the highest proportion since September 2010.

It helped boost the number of residential valuations by almost a third (31%) more than in February 2011.

Despite the Government saying in its 2011 Autumn Statement that the stamp duty holiday had not proved effective, John Bagshaw of Connells said that there is 'no doubt' that the imminent deadline has acted as the catalyst for the surge in first time buyer activity.

"Many first-time buyers are now feeling a real sense of urgency, and this has boosted overall mortgage market activity in the last month," he added.

"But the first-time buyer demand has also been supported by stronger lending figures at the lower end of the market, not to mention mortgage affordability.

"If this trend continues into the spring, the improvement should help soften the blow of the end of the stamp duty holiday in the longer-term."

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