Lenders call for reform of Stamp Duty

Gross mortgage lending in February was an estimated £9.5bn, according to the Council of Mortgage Lenders.

This is almost identical to January’s gross lending figure of £9.475bn and marginally (less than 1%) higher than the £9.419bn in February 2010.

Although lending remains weak overall, stronger remortgage activity has continued into the early months of 2011. While there has been a seasonal pick-up in house purchase demand over recent weeks, this appears to be weaker than a year ago despite the fact that there was a lull at the start of 2010 following the expiry of the earlier stamp duty concession at the close of 2009.

CML chief economist Bob Pannell said: “There is little in the latest batch of market data that would cause us to revise our market forecasts for 2011, and nothing that alters our underlying view that this is going to be a challenging year for households and the housing market.

“The housing market remains stuck in a rut and, while we do not anticipate much relief in this week’s Budget, it does present an opportunity for the Chancellor to address the reform of stamp duty.

“What we have instead is the introduction of a new 5% band. That is an irrelevance for the majority of home-buyers but is another indication of the haphazard and arbitrary nature of this tax, where reform is long overdue.”