Stamp duty date sparks a rush by first-time buyers

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The Council of Mortgage Lenders today reported that 18,700 loans were advanced to new homeowners in the last four weeks of 2011.

The CML said it expects that trend to accelerate before the Government's stamp duty exemption - which allows first-time buyers to avoid the 1% duty on homes costing under £250,000 - ends at the start of March.

It said the proportion of properties costing less than £250,000 snapped up by first-time buyers grew from 50% to 53% during December.

Paul Smee, CML director general, said: "We have been expecting a flow of first-time buyers onto the market as the stamp duty exemption ends in March, and December's figures appear to show this has now begun.

"The market in 2011, while still subdued, saw a welcome increase in annual gross lending for the first time since 2007, when the financial crisis began," he added.

"With the eurozone problems still rumbling on, however, we believe there is still a real risk that this year's lending levels will be lower than those seen in 2011."

The overall property market in the UK, however, remained almost unchanged in December from a month earlier.

Buyers organised 47,400 mortgages worth £6.9 billion, which totted up to a 1% increase in volume but no change in value from November.

Remortgages fell by 15% in December, as the deterioration in the economy made a rise in interest rates seem a long way off.

Today property industry experts warned that the surge in first-time buyers would provide little respite for the housing market in general.

Jonathan Samuels, chief executive of Dragonfly Property Finance, said: "In such a tough market, it's no surprise that first-time buyers are using every single support that's out there.

"For many people, 2012 will be a year of sitting on hands."