The government's stamp duty holiday on house purchases has failed to stimulate demand among homebuyers, according to the Council of Mortgage lenders.

In September the government announced a one-year suspension of stamp duty, raising the minimum threshold from £125,000 to £175,000 in an attempt to provide the declining property market with fresh impetus.

Despite this action the number of mortgages for new house purchases fell 15% in September, down from 41,000 to 34,900.

Banks are becoming even more cautious over their lending terms - with first time buyers on average having to produce 16% of a property's value to secure a mortgage.