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Rush to beat stamp duty holiday in evidence again

Rush to beat stamp duty holiday in evidence again

Category: Mortgages

Updated: 23/02/2012
First Published: 23/02/2012

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New figures from the British Bankers' Association (BBA) show further evidence of first time buyers racing to beat the stamp duty holiday deadline.

The number of mortgage approvals for house purchases hit a two-year high in January, reaching 38,092.

House purchase numbers are up by more than a third (34%) on January 2011.

The figures have been boosted by first time buyers completing their deals before the stamp duty holiday comes to an end on March 24.

The average value of a mortgage approval in January was £144,400.

Currently, first time buyers are exempt from paying a 1% levy on homes worth up to £250,000.

The decision to end the initiative has come under fire from the Council of Mortgage Lenders, which on Monday announced that mortgage lending increased by 10% in January, boosted by first time buyers.

In addition, the National Association of Estate Agents said it saw more first time buyers than at any point in the previous eight months during January - a month when activity is usually dulled.

Almost a quarter (23% of sales) were made to first time buyers during the month, up from 21% in December and the highest seen since May 2011 (24%).

Other figures from the BBA showed that demand for unsecured lending remained relatively weak.

"January saw the high street banks approve more mortgages for house purchase than of late, despite low household confidence, as some people try to complete transactions before the stamp duty holiday ends in March," said David Dooks, statistics director at the BBA.

"Demand for unsecured personal borrowing remains low as consumers continue to repay debt."

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