Thrifty Loans

Stamp duty has become the ban of the homebuyers’ existence; well, at least, it has become so in the South, as it has been shown that homebuyers in the South are paying over three times more than those in the North.

The average stamp duty paid by property buyers in London, the South East, South West and East of England was £6,820 in 2006-7, which has been a quarter of the average yearly pay.

Compared with that, in the Midlands, North of England and Scotland, the average stamp duty bill was only £1,994, representing around 10% of average wages. Figures come from online mortgage firm mform.co.uk.

In the southern regions the amount of stamp duty paid on average was up by 31% on the previous, whereas in the North it was only up by 21%.

Stamp duty is already regarded as a stealth tax as it has by no means kept pace with the increase in house prices, and those in the South will feel that the Government is taking them for granted. The calls for stamp duty to be reviewed have been heard several times during 2007, and this imbalance will hear those voices raised again. The thresholds are lagging way behind house price inflation.

Prior to Labour coming to power in 1997, the average purchase price for a first home resulted in the payment of no stamp duty, but the Treasury now benefits from first-time buyers to the tune of an average of £1,600.

Conservative leader David Cameron wants to abolish stamp duty on all homes up to £250,000, which would make 90% of first-time buyers exempt from the tax, from Treasury data.

Currently stamp duty is charged at 1% on properties worth between £125,000 and £250,000, 3% on homes between £250,000 and £500,000, and 4% on those worth more than £500,000.