By myfinances.co.uk staff
The end of the stamp duty exemption for properties valued at between £125,000 and £175,000 saw lending for house purchase fall sharply in January, particularly among prospective first-time buyers, according to a new report.
Figures from the Council of Mortgage Lenders (CML) show there were 32,000 loans worth £4.7 billion approved for buying a home in the first month of the year, 49% down on December.
The number of first-time buyers entering the market was down 54% in January. There were 11,300 loans worth £1.3 billion for this group, down from 24,800 deals worth £2.9 billion the month before.
According to the CML, this reflects the fact that a high proportion of purchases among these house hunters are in the £125,000 to £175,000 band.
Indeed, transactions for properties valued in this price bracket involving first-time buyers had risen by 63% in December, as consumers looked to beat the end of the tax holiday.
CML director-general Michael Coogan said: “We expect lending over the coming months to remain weak as uncertainty over of the state of the economy and the upcoming election are likely to continue to hold back housing market activity.”
According to Nationwide, the average UK house price in January was £163,481.
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