Friday, Feb 12, 2010
Tax tail wags the property dog
FT: Mortgage approvals surge as stamp duty holiday ends
The number of loans to first-time buyers hit a two-year high at the end of last year amid a rush to beat the stamp duty increase, research by the Council of Mortgage Lenders (CML) showed. There were 24,900 loans to first-time buyers in December 2009, the highest number since November 2007, according to CML figures.
More than half (55 per cent) of mortgages approved were on properties costing less than £175,000, up from 51 per cent in November and therefore exempt from stamp duty before the threshold moved back to 125,000 at the start of this year.
Posted by jack c @ 11:31 AM (356 views) Add Comment
4 Comments
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2. brickormortis said...
That is a brilliant title Jack, well done! ...tax tail wagging the property dog - brilliant!
3. jack c said...
brickormortis - thanks for your kind comments, it strikes me that a lot of people appear have jumped into what is likely to be the biggest financial commitment of their life (and an illiquid asset class) on the back of a temporary tax break. I have seen this happen before -
(1) A mad rush to buy endownent plans before LAPR (Life ass premium relief) was scrapped back in March 1984 - Lots of people lost out massively in one of the (so called) biggest misselling scandals of the last decade - but they did benefit from the 12.5% premium relief !!
(2) A mad rush to buy property before double MIRAS relief was phased out August 1988 - property prices bubbled and subsequently burst
Now I'm not saying that things will be on the same scale as (2) above but I do now expect the trend line to head South again.
4. Luvit said...
Wave your hands in the air !!! Hpc on standby for now, perhaps for good.