The UK’s Council of Mortgage Lenders have warned that the UK property market could be plunged further into turmoil if the Government starts making first-time buyers pay stamp duty again.

At present, first-time buyers are exempt from paying tax on legal documents, such as the deeds to a house, if they pay less than £250,000 for the property.

However, this concession is due to expire next March, prompting concern from the Council of Mortgage Lenders (CML), who revealed that sales of homes that would have been exempted slumped when a similar concession ended in December 2009.

The body feels that a similar fall in house price purchase could occur if the Government does not extend the exemption, further adversely affecting already teetering confidence in the housing market.

CML Director General, Paul Smee, said: “The CML believes it would be a mistake to pull the plug on the concession – at least until the housing market returns to a firmer footing.”

Its stance is seemingly reinforced by the fact that 87% of revenue generated by stamp duty comes from homes which cost more than £250,000

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