Figures from the Council of Mortgage Lenders (CML) show that half of all first-time buyers and more than three quarters of home movers now pay stamp duty - despite the decision by the Chancellor to raise the threshold from £60,000 to £125,000 in his last two Budgets.
The figures emerge from our new monthly Regulated Mortgage Survey (RMS) - the most comprehensive, regular and reliable source of mortgage market data in the UK. The survey shows that in March, 17,200 first-time buyers (50%) paid stamp duty, while 44,700 people moving (80%) to a new home also paid the tax.
Today's new data also reveals an increase in remortgaging. In March, remortgaging accounted for 36% (£10.3 billion) of lending, 12% more than the previous month and 6% more than March 2005. Other types of lending, including buy-to-let and further advances, have also increased.
Despite monthly fluctuations in remortgaging percentage levels, it remains a significant part of overall mortgage lending each year and has exceeded £100 billion for the past 3 years running. In 2005 remortgaging totalled £117 billion out of total annual lending of £288 billion.
The new monthly survey also reveals the recent popularity of fixed-rate loans declined slightly, from 70% of all loans in February to 69% in March - the lowest level since August last year. This reflects the rise in medium and long-term interest rates which have reduced the attractiveness of fixed-rate deals. The downward trend in the percentage of fixed-rate loans is likely to continue in the coming months.
Commenting on the data from the RMS, Director General of the CML Michael Coogan said: "The RMS shows the proportion of mortgages taken out by first-time buyers is low. With half of them having to pay stamp duty it is clear that tax continues to add to their affordability problems. Reform of stamp duty is long overdue. If it had been uprated in line with house price inflation since 1997 the threshold would stand at £145,000, helping many more first-time buyers onto the property ladder and into their own homes."
