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Homebuyers pay excessive stamp duty fees

Michael Lloyd

July 25, 2019

stamp duty

On average across the UK, homebuyers are paying £2,089 in stamp duty on the average house price of £229,431, One 77 Mortgages has found.

With the average gross annual wage standing at £29,832 stamp duty accounts for 7% of the money earnt.

During his election campaign, new Prime Minister Boris Johnson announced plans to potentially transfer stamp duty to the responsibility of the home seller.

Alastair McKee, managing director of One 77 Mortgages, said: “Stamp duty is often a cost that is overlooked by homebuyers when budgeting for their purchase, particularly first-time buyers, but it’s one of the more sizeable financial requirements when buying other than the mortgage deposit.

“Budgeting for it is essential and failing to do so can put your purchase in jeopardy.

“It makes sense on the face of it to flip the responsibility of payment to the seller as they are the ones benefiting from the sale of a property and this could soon be the case should Boris push the initiative through.

“However, there are worries that this could dampen the enthusiasm of sellers to actually sell and could bring more detriment than benefit to the market.  

“There is certainly an argument to scrap it completely. It’s an archaic land tax and with the cost of buying and selling growing at such a rate, it’s yet another financial obstacle that many could do without, and many more struggle to overcome altogether.”

This 7% figure doubles in London and the East of England, whilst in the South East it is 19%.

The largest across the UK is in the London Borough of Haringey, with nearly £20,000 payable in stamp duty, taking 55% of the gross annual wage of £35,015.

There are 97 areas in the UK where 20% or more of the average annual salary is required to pay stamp duty on the average house price.  

 


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