Halifax: Majority of first-time buyers in the south pay stamp duty

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Halifax: Majority of first-time buyers in the south pay stamp duty

Mon 10th Mar 2008

Halifax is calling on the government to raise stamp duty thresholds, as its latest research reveals that last year the average first-time buyer paid stamp duty in 99 per cent of local authorities in the south of the UK.

In London, 62 per cent of first-time buyers paid the higher rate of stamp duty, with the average amount paid standing at £8,675 - which is equivalent to 21 per cent of annual gross full-time earnings.

Across the United Kingdom, the average amount paid by people taking their first step onto the property ladder in 2007 was £1,751, 82 per cent more than the amount paid five years ago.

However, in four regions of the UK - the north, Yorkshire and the Humber, Scotland, and Wales - the average price of a property purchased by a first-time buyer was less than £125,000, meaning they were not required to pay any stamp duty.

Martin Ellis, chief economist at Halifax, said: "Stamp duty has again become an issue for first time buyers because the stamp duty thresholds have not kept pace with house price inflation … The government has raised the one per cent threshold in recent years; unfortunately, more needs to be done."

An earlier study from the bank found that over the past half a decade the number of properties valued at over £250,000 and therefore falling in the higher stamp duty bands has increased significantly, from 1.8 million in 2002 to 5.5 million in 2007.

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