Friday, February 12, 2010

Tax tail wags the property dog

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 (723 views)
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3 thoughts on “Tax tail wags the property dog

  • brickormortis says:

    That is a brilliant title Jack, well done! …tax tail wagging the property dog – brilliant!

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  • 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.

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  • Wave your hands in the air !!! Hpc on standby for now, perhaps for good.

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