Residential Mortgages The End Of The Stamp Duty Holiday

It has been reported by the Council of Mortgage Lenders that following the end of

the stamp duty holiday on 31 March 2012, the rate of residential mortgages offered slumped by 19%. This was its lowest level in over a year.

After a much more buoyant period in the run up to April months, gross mortgage lending fell to just over 10.2bn in April 2012 compared with 12.6bn in March. This is the lowest figure since April 2011 when lending came in at 10bn.

It is interesting times at present but we need to look at the meat on the bones.

It is only natural that first time buyers rushed in to beat the stamp duty deadline, we saw this within our business; after all why pay a tax you dont have to. We also expect a slow down in August with people going abroad to beat the British no summer we also have the 2012 Olympics.

The Olympics to me is a once in a lifetime opportunity and I feel once it is here most people will be taking some time out to watch it which again will affect sales. Then put into the mix the Eurozone crisis and banks are even more nervous to lend to each other. The politicians still havent sorted out what to do but when you have so many politicians involved it is hardly surprising. Is Germany really responsible for sorting out the Euro crisis?

We also have all the news about LIBOR fixing and we are still waiting to see who said what to whom and if any pressure was applied to Barclays or not. Also it looks like other banks were involved. Lets see how this story evolves. But what people have over looked is that is LIBOR rates were lowered it is good news for the customers as it would have meant lower mortgage and loan rates NOT higher.

It looks house prices will end the year down 3%, this will mean that for first time buyers it is a fantastic opportunity to get onto the housing ladder, so the stamp duty holiday has gone (they were saving 1%) well if house prices drop by 3% this means buyers are better off by 2%.

Also for most people we are better off buying and selling houses if the house prices drop very slightly as long as you only own 1 property. Let me explain. If the price is lower you will get less for your property but you will pay less for your next property, stamp duty will be lower because you are paying less etc.

We are all agreed that we are a long way away from an economic recovery but banks do want to lend to people with good incomes, people who have a deposit and people who dont have any bad credit. They are making more checks on people but at the end of the day lending is how banks make their money.

In the meantime lets hope for some good old sunshine.

by: Holley Samuel

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