Stamp duty increase ‘delivers nothing for FTBs’
Matthew Wyles, Group Development Director at Portman Building Society commented: “The tiny increase in the Stamp Duty threshold announced by the Chancellor in the latest Budget is a huge disappointment for First Time Buyers.
“The increase of £5,000 to £125,000 represents a 4.2% rise, but this is effectively neutralised by property price inflation. The latest data from the ODPM reports UK annual house price inflation in January 2006 at 4.3%. The shortfall in the London property market is even more significant, ODPM figures indicate 5.3% house price inflation during the same period, over 1% more than the percentage rise in the threshold. It is clear that the Chancellor is determined to maintain and increase his revenue from this unjust tax.
“Looking specifically at First Time Buyers, when you consider that the latest ODPM figures (Q4 2005) show that the average First Time Buyer property in the UK now costs £135,742, it is clear that the rise in threshold will be of very little benefit to most First Time Buyers.
“Furthermore, the increase is likely to affect less than 3% of house sales in the wider market. Land Registry data shows that 42,000 properties were sold in the £120-£150,000 house price band in Q5 2005. On a proportional basis, only 7,000 sales were in the £120-£125,000 band and would now be free of stamp duty. Therefore, only 28,000 properties out of 1 million annual sales would now be newly exempt under the new threshold.”