The temporary increase in the stamp duty threshold saw 51% of homebuyers avoiding stamp duty in September, compared with 22% in September last year, but the number of house purchase loans was 57% lower than September 2007, according to new data from the Council of Mortgage Lenders (CML).

There were 35,000 loans for house purchase worth £5bn in September, down -15% in volume and -15% in value from August, and less than half September 2007 levels.

There were 62,000 loans for remortgage worth £8.5bn in September, down -15% in volume and -16% in value from August, but still around two thirds of September 2007 levels.

There were 21,500 loans to home movers worth £3.4bn, a decline of -59% in volume and 61% in value from September 2007. The typical home mover borrowed 71% of the property’s value and 2.82 times their income, compared with 72% and 3.02 a year ago.

Michael Coogan, CML director general, said: “While house purchase activity has reached exceptionally low levels, it is encouraging to see transaction costs lowered for a larger proportion of borrowers. The Government should consider what other measures can be brought forward to enable the market to transact more easily.

“Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk. If the pricing and volume of interbank lending continues to improve, this should help the flow of mortgage lending.”

Simon Rubinsohn, the Royal Institute of Chartered Surveyors’ chief economist, added: “The latest CML data very clearly demonstrates the continuing squeeze on mortgage lending. However it is encouraging that the temporary increase in the stamp duty threshold does appear to be encouraging some new entrants into the market. Buyer enquiries, having edged up further in the October RICS survey, should get a further boost from the latest reduction in interest rates. On the basis of this, it is not unreasonable to conclude that transaction levels are now pretty close to a floor. Nevertheless, prices are likely to continue to weaken for some time to come with rising unemployment increasing distress selling and in the process raising the inventory overhang of unsold properties.”