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Stamp duty now £7,500 for first-time buyers
Mira Bar-Hillel, Property Correspondent10 Mar 2008
First-time buyers in London now have to pay on average more than £7,500 in stamp duty, new figures show.
The figures, released today by mortgage lender the Halifax, also show that the average property price for a first-time buyer is now almost £300,000 in the capital, with two boroughs breaking the half-a-million pound mark.
The figures mean that with conveyancing fees, and a 10 per cent deposit as lenders tighten rules amid credit crunch fears, the average first time-buyer in London now needs £39,000.
Stamp duty - which is paid by the buyer of a house - is one per cent for homes worth between £125,000 and £250,000, three per cent on homes between £250,000 and £500,000 and four per cent for properties worth more than £500,000.
First-time buyers in nearly twothirds of London's boroughs paid the higher tax at the three or four per cent rate last year. The figures show that the average stamp duty bill faced by first-time buyers across the country has nearly doubled during the past five years, with an 82 per cent rise.
They also revealed an increasing North/South divide - with the average person buying in London, the South-East, South-West and East paid stamp duty in 99 per cent of local authorities during 2007, while in northern regions people were liable for it in just 42 per cent of areas.
Martin Ellis, Halifax chief economist, 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.
"We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade."
The news came as the Government's plans for three million new homes to be built by 2020 suffered a setback after a report warned that house-building is slowing down.
The Hometrack study revealed that the amount of new construction work in England has already fallen by 10 per cent over the past 18 months.
Researchers said the situation would get worse over the next few years as the US credit crunch and weakening house prices start to bite.
Richard Donnell, Hometrack's Director of Research, said: "Falling levels [of house building] mean there is no end in sight to the affordability problems facing the housing market".
| London Boroughs | Average FTB House Price £s 2007 | Residential Stamp duty bill £s (2007) |
|---|---|---|
| Barking and Dagenham | 193,925 | 1,939 |
| Barnet | 274,818 | 8,245 |
| Bexley | 184,476 | 1,845 |
| Brent | 288,026 | 8,641 |
| Bromley | 249,978 | 2,500 |
| Camden | 423,906 | 12,717 |
| Croydon | 212,918 | 2,129 |
| Ealing | 287,498 | 8,625 |
| Enfield | 227,660 | 2,277 |
| Greenwich | 229,717 | 2,297 |
| Hackney | 292,401 | 8,772 |
| Hammersmith and Fulham | 440,068 | 13,202 |
| Haringey | 274,082 | 8,222 |
| Harrow | 262,834 | 7,885 |
| Havering | 204,560 | 2,046 |
| Hillingdon | 225,718 | 2,257 |
| Hounslow | 255,075 | 7,652 |
| Islington | 366,753 | 11,003 |
| Kensington and Chelsea | 669,776 | 26,791 |
| Kingston upon Thames | 270,227 | 8,107 |
| Lambeth | 291,138 | 8,734 |
| Lewisham | 227,024 | 2,270 |
| Merton | 285,573 | 8,567 |
| Newham | 233,561 | 2,336 |
| Redbridge | 252,115 | 7,563 |
| Richmond upon Thames | 346,214 | 10,386 |
| Southwark | 285,360 | 8,561 |
| Sutton | 221,386 | 2,214 |
| Tower Hamlets | 322,444 | 9,673 |
| Waltham Forest | 230,123 | 2,301 |
| Wandsworth | 372,699 | 11,181 |
| Westminster | 500,781 | 20,031 |
Reader views (2)
Don't worry, prices falling, hot money leaving - banks will just have to write off the difference. Wait 2 years and pick up your property for much less. Just remember to have your 25% deposit saved.
- Robbo, uk, 11/03/2008 10:37
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"Stamp duty has again become an issue for first-time buyers because the stamp duty thresholds have not kept pace with house price inflation."
It's become an issue with all home buyers for that reason. It's the same as the 40% tax bracket, it moves slower than the rate of inflation causing more and more people to slip into it. If we don't shift this nefarious Labour government soon, people on minimum wage will soon be falling into it.
- Robin Taxpayers, Westminster, 10/03/2008 14:41
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