The temporary increase in the stamp duty threshold saw 51 per cent of homebuyers avoiding stamp duty in September
This compares to 22 per cent in the same period last year. However, the number of house purchase loans was 57 per cent lower than September 2007, according to new data from the Council of Mortgage Lenders. There were 35,000 loans for house purchase worth £5 billion in September, down 15 per cent in volume and 15 per cent in value from August, and less than half September 2007 levels. There were 62,000 loans for remortgage worth £8.5 billion in September, down 15 per cent in volume and 16 per cent in value from August, but still around two thirds of September 2007 levels. First-time buyers in September borrowed an average of £104,500, down from £108,000 in August. The amount borrowed has been steadily declining since peaking at £119,250 in July 2007. This has brought the average first-time buyer income multiple down to 3.18, its lowest level since March 2006. But first-time buyers have been continuing to put down larger deposits (16 per cent in September) and fewer of them are entering the market - only 13,400 in September, down from 28,200 in September 2007. There were 21,500 loans to home movers worth £3.4 billion, a decline of 59 per cent in volume and 61 per cent in value from September 2007. The typical home mover borrowed 71 per cent of the property's value and 2.82 times their income, compared with 72 per cent and 3.02 a year ago. CML director general, Michael Coogan, said: "While house purchase activity has reached exceptionally low levels, it is encouraging to see transaction costs lowered for a larger proportion of borrowers. The government should consider what other measures can be brought forward to enable the market to transact more easily. "Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk. If the pricing and volume of interbank lending continues to improve, this should help the flow of mortgage lending."
Date: 13th, November, 2008
Author: Ben Wilkie
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