Stamp duty 'avoided by half of borrowers'
Wednesday, 12th November 2008

Half of borrowers were able to avoid stamp duty in September, according to a new survey.

Many people buying property in the UK were granted an exemption from the tax after the chancellor dropped stamp duty on houses worth £175,000 or less, although this move did not stop a 57 per cent drop in the number of home purchase loans, according to the Council of Mortgage Lenders (CML).

Furthermore, there were 62,000 remortgage loans worth £8.5 billion during September, 15 per cent lower than the previous month.

Commenting on the figures, CML director general Michael Coogan said: "Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk."

He added that if pricing and volume of interbank lending was restored to a better rate, the flow of mortgage lending should significantly improve.

Last week, Mr Coogan commended the monetary policy committee on its decision to drop interest rates to three per cent.