Morning:
3°c
Only 6,000 Londoners have benefited from the stamp duty holiday in its first year, figures reveal today.
In September last year, the Government abolished the one per cent levy on home purchases for properties between £125,000 and £175,000 in a bid to revive the stagnant housing market.
But it has had little impact in the capital, where the average home costs £374,284 - nearly double the national average.
In the City of London, no transactions benefited from the temporary tax relief, while only eight were eligible in Kensington and Chelsea and just 35 in Westminster, according to property website zoopla.co.uk.
Barking and Dagenham saw the highest proportion of homebuyers do well from the scheme, at more than 40 per cent. In total 6,074 people in London saved on stamp duty, with 83 per cent of homebuyers in the capital still paying the tax, which rises to four per cent for sales worth over £500,000.
Nationally only 42 per cent of house transactions were hit with stamp duty charges in the 12 months to the end of August, while more than 115,000 homebuyers benefited from the tax holiday.
However that is still less than a quarter of what was predicted by ministers, with people saving £173 million, compared with the £600 million forecast.
Zoopla's Nicholas Leeming said: "First-time buyers in London face the hardest task getting onto the property ladder, but have been helped least by the stamp duty holiday. Londoners are also paying a disproportionate share of the country's stamp tax bill. The stamp duty holiday has so far failed to reinvigorate the housing market in the way that the Government predicted."
Property experts called on the Government to extend the tax break and raise the threshold to £250,000.
Increasing it to this level would make 61 per cent of all properties currently on the market across the country exempt from stamp duty, based on the homes available on FindaProperty.com.
The website's director Michael O'Flynn said: "Now is not the time to cancel the stamp duty holiday; instead the Government must extend it with a higher threshold which reflects the needs of first time buyers in the more expensive South-East. This would help aid the market's ongoing recovery into 2010.
"The cost to the Chancellor is a drop in the ocean compared with other spending to help boost the economy."
Reader views (3)
£175k is a joke in London. My first house was £250k and my second £380k. It's a 2 bed terraced house. You couldn't buy a garage to park your car in for £175k.
I know people outside London think we're all swimming in cash, but after paying living expenses and Darling's had his grubby fingers on what remains there not alot left over.
- Rich, London
Another big hype by this Government. All of their alleged, "give aways," have been total failures. Typical NuLabour ideas - they look good in print. Made in haste with the consequences not thought through. You only have to look at the car scrappage scheme. It has kept car salesmen in business; but most of the vehicles sold were foreign made. Therefore the Uk tax payer has helped to keep foreign workers in jobs. No wonder we are still in recession!
- Brian G, Norfolk Gorleston
What places did people find in London for under £175,000? In most parts of London you can barely find a studio, i.e., a single room with a small bathroom, for under £200,00.
- Derek, London
