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Move on Stamp Duty ‘not enough’

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23/03/2006

Chancellor Gordon Brown raised the nil rate Stamp Duty threshold nominally in his budget from £120,000 to £125,000, but many in the mortgage industry argued that this was not enough to help first-time buyers on to the ladder.

This means that buyers purchasing properties over £125,000 will have to pay 1% of the purchase price as a tax to the Government. And rising house prices means that the average first-time buyer house price is already higher than that.

Brian Murphy, lending manager at the Mortgage Advice Bureau, said: “The rise in the nil rate stamp duty band to £125,000 is pathetically low. Figures released from the ODPM for January demonstrated that the average first time buyer house price is now close to £154,000.”

Stephen Leonard, director of mortgages at Alliance & Leicester pointed out that most buyers are looking for properties above the threshold. He said: ”The majority of first-time buyers (61%) look for homes over the previous £120,000 stamp duty threshold. Whilst this is a step in the right direction and recognises the plight of first time buyers who are the life blood of the housing market, it represents only a four per cent increase.”

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