Mortgage lending falls
Total mortgage lending fell in June, according to the Council of Mortgage Lenders (CML).
In total, £11.9 billion was lent out in mortgages last month, a 5% decline on lending in May. But overall lending for the first half of the year was up 7%, compared to the same period in 2011.
"Mortgage lending has experienced something of a see-saw pattern over recent months, largely reflecting the short-term spike and subsequent trough in house purchase activity associated with the ending of the stamp duty concession for first-time buyers in late March," says the CML's chief economist Bob Pannell.
"Weaker mortgage lending in June points to a more subdued tone for the housing market in line with that for the wider economy," he adds.
"The stamp duty concession has had a significant impact on borrowing," says Mark Harris, chief executive of mortgage broker SPF Private Clients. "We expect a drop off in the second half of the year now that this impetus has been removed, combined with the slowdown expected during the Olympics, the continuing eurozone crisis and weak consumer confidence."
He adds: "Any recovery in the housing market remains a long way off."
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.