Last updated at 15:53, Friday, 23 March 2012

Advertising feature. Mortgage lending dropped by 14.4% from December to January, yet it was 10% higher than January 2011, when just 40,000 mortgages were approved.

Advertising feature. Mortgage lending dropped by 14.4% from December to January, yet it was 10% higher than January 2011, when just 40,000 mortgages were approved. Experts have put this down to the fast-approaching Stamp Duty Holiday Deadline, but could it also be a sign that the housing market is improving?

Lending reaches £10.5bn

According to the Council of Mortgage Lenders (CML), gross lending hit £10.5bn in January of this year, and in the same token, it linked the month-on-month drop with ‘anticipated’ seasonal decline.

Commenting on the figures, CML chief economist Bob Pannell said: “Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year.”

“This can only be good news for the housing market further down the track.”

About the CML

The CML’s members are banks, building societies, and other lenders who make up as much as 94% of home mortgage lending in the UK.

What is stamp duty and how it will affect me?
Stamp duty land tax – to offer its full name- is a tax payable on property or land – the level of taxation is variable depending on the value of the property. In 2010, a scheme was introduced whereby new homebuyers were no longer required to pay stamp duty on houses worth up to £250,000. But 24th March will spell the end of the this proposal, meaning the majority of first-time buyers will be required to pay the 1% duty unless they are buying a home worth less than £125,000.

To explore how stamp duty will affect you, we should first have a look the different rates:

Home purchases for less than £125,000 – 0% for everyone
£125,000 – £250,000 – 1% or 0% for first-time buyers
£250,000 – £500,000 – 3%
£500,000 – £1,000,000 – 4%
£1,000,000 + – 5%
To shop around for the best deals on mortgages, we recommend you speak with a qualified mortgage advisor who will be able to talk you through your strongest options.

Who can be classified as a first-time buyer?

To clarify, couples (or groups of friends buying a house together) must both be first-time buyers in order to be eligible for the stamp-duty free scheme. If one of you has previously owned a home, leasehold, or freehold, anywhere in the world, then you will not be exempt.
The same applies if you ever have inherited a home – you will be registered as having owned a property, and so you will not benefit from stamp duty exemption.

News published in http://www.newsandstar.co.uk