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First-time buyers put under the microscope
The average first-time buyer (FTB) in Great Britain paid stamp duty in 2007 in 99 per cent of local authorities (LAs) in the south, compared to 42 per cent in the north, according to Halifax research, which compared average residential stamp duty bills for FTBs in 342 LAs from 2002 to 2007.
The average FTB in 19 per cent of LAs in the south paid stamp duty at the higher rates of three and four per cent in 2007, and the average FTB in nearly two-thirds (62 per cent) of London boroughs paid the tax at the higher rates in 2007.
The research also revealed that the stamp duty bill for the average FTB in the UK in 2007 was £1,751, which was £791 (82 per cent) more than was paid in 2002 (£960).
The stamp duty bill for the average FTB in Greater London in 2007 was £8,675, which was £6,807 (364 per cent) more than paid in 2002 (£1,868).
Also, the average FTB's stamp duty bill in London was equivalent to 21 per cent of annual gross full-time average earnings in 2007, compared with just 6 per cent of earnings for the UK as a whole.
The stamp duty bill for the average FTB in 30 LAs across the whole of Britain has risen by at least £5,000 in the past five years.
The survey reports that in four regions of the UK the average FTB house price was less than £125,000 – with no stamp duty bill payable. These regions included the North, Yorkshire and the Humber, Scotland and Wales.
Aside from the south of England, the highest stamp duty bills for the average FTB in 2007 were in Daventry, East Midlands and Harrogate in Yorkshire.
Martin Ellis, chief economist at Halifax, said of the results: "Stamp duty has again become an issue for first time buyers because the stamp duty thresholds have not kept pace with house price inflation. First-time buyers in the south are most likely to pay but so too are a growing percentage in the north. In London the average first time buyer is now liable to pay a stamp duty bill of more than £8,000.
“The government has raised the 1 per cent threshold in recent years; unfortunately, more needs to be done.
"We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade and to commit to index the thresholds for house price inflation in the future," Mr Ellis added.
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