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Borrowers rushed to catch stamp duty deadline

The Council of Mortgage Lenders says Bank of England data suggests many borrowers rushed into buying a new property so as to catch the stamp duty deadline.

According to the Bank, gross mortgage lending totalled £13.4bn for December 2009, with net lending up £1.2bn on November’s figures. The CML says these strong end of year figures indicate a rush to get hold of home loans before the end of the stamp duty cessation for all properties under £175,000 on December 31.

CML economist Paul Samter says the latest mortgage data published today confirms the likelihood that there may have been a “bunching” of house purchase transactions in December. As a result he says the first mortgage lending figures of 2010 may be disappointing in comparison. Stamp duty has since reverted to its original level of a 1 per cent levy on all properties above £125,000.

Samter says: “These figures confirm that the mortgage market ended 2009 in much better shape than it started. It should be no surprise if January and February this year appear particularly slow.”

The Bank says total net lending to individuals rose by £1.2bn in December, mirroring the total net increase in November of £1.2bn. Within the total, net lending secured on dwellings increased by £1.2bn, down from November’s increase of £1.6bn

The number of loan approvals for house purchase of 59,023 was lower than the November figure of 60,045. While approvals for remortgaging of 27,276 were higher than in November, it still remains below the previous six-month average.

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