The number of first-time buyers getting on to the property ladder hit a two-year high during December as people rushed to beat the end of the Government’s stamp duty holiday, new figures show.
Around 24,900 people bought their first home with a mortgage during the month, 26% more than in November, and double the number for December last year, according to the Council of Mortgage Lenders.
The group said the surge, which saw the highest number of first-time buyers enter the market since November 2007, was driven by people rushing to beat the end of the stamp duty holiday on properties costing between £125,000 and £175,000.
It said 55% of homes purchased by all buyers during the month cost less than £175,000, with 10,300 first-time buyers purchasing a property for between £125,000 and £175,000, 63% more than in November.
The Government waived stamp duty on properties costing up to £175,000 in September 2008 to help boost the flagging property market.
But the level at which the tax kicks in fell back to £125,000 at the beginning of this year.
The CML figures were supported by a report from research group Acadametrics, which showed that the number of homes changing hands in England and Wales jumped to its highest level for two years during December, boosted by the impending end of the stamp duty holiday.
The group said transactions in areas where the average house price was below £175,000 increased by 10.2% during the final three months of the year, compared with the previous quarter, but sales in London rose by just 0.2%.
It said the volume of flats, terrace and semi-detached homes changing hands across the country rose by 6% during the quarter, but there was only a 1% rise in the sale of detached properties.
In the South East and South West, the number of flats and terrace houses sold jumped by between 8% and 13%, but there were declines of up to 4% in the sale of larger more expensive homes in some areas.
Peter Williams, chairman of Acadametrics, said: “Without doubt, year-end activity was heightened by the anticipated end-of-year closure of the stamp duty holiday for properties up to £175,000.”
But commentators have warned that the end of the holiday could lead to a fall in transactions during the early months of 2010, as people rushed to get sales completed before the end of the year.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The stamp duty holiday was a real fillip for first-time buyers, and they clearly took the Government up on its offer.
“However, because so many deals were pushed through in December, there is likely to be a drop-off in first-time buyer transactions in the first few months of the year.”
The CML figures also showed a continued pick-up in the mortgage market during December, with 62,800 mortgages advanced for house purchase, also the highest level for two years.
The number of people remortgaging to a new deal remained unchanged at 28,000, although this was a third fewer than during the same month of 2008.
But despite the pick-up in lending towards the end of the year, the market for the whole of 2009 was subdued, with a total of £69.6 billion advanced for house purchase, well down on 2007’s total of £154.7 billion.
Total lending during the year, including remortgaging, was £143.6 billion, 60% down on 2007’s record of £362.6 billion.