Stamp duty move hits home loans

Mortgage borrowing fell sharply after a stamp-duty concession for first-time buyers was withdrawn, lenders said yesterday.

The number of loans to home buyers fell by 30 per cent month-on-month in April to 36,000 loans worth £5.3 billion, the Council of Mortgage Lenders (CML) said.

A total of 12,600 loans worth £1.5bn was advanced to first-time buyers in April, around half the number recorded in the previous month, when buyers rushed to complete deals before the two-year concession ended, the CML found.

The body warned that a significant pick-up in purchases is unlikely in the coming months because of economic uncertainty.

The drop in first-time buyer activity was seen mainly among homes worth between £125,000 and £250,000, which would have been exempt from stamp duty until March.

Purchases of homes in this bracket plummeted by 70 per cent month-on-month in April.