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Stamp out stamp duty

Sam Cordon

August 6, 2013

The think-tank warned that the higher rates of stamp duties have now become “punitive” for ordinary families looking to move up the property ladder.

Taxpayers Alliance said a widening gap between house prices in the south of the England and those elsewhere is pushing the stamp duty unfairly on those buying in more expensive areas of the country.

It said this hinders southern-based first-time buyers and makes it difficult for families to relocate for reasons such as employment.

Ben Thompson, MD Legal & General Mortgage Club, said: “Stamp Duty remains a barrier to entry into the housing market for a number of want to be homeowners, however the levy is particularly harsh for those ‘second steppers’ wishing to move on to their next home.

“Throughout the 1990s the level of duty payable was low compared with much of Europe and other countries however at the turn of the millennium we saw significant increases.

“Whilst house prices rose and the economy and household wages grew, the cost of Stamp Duty for most second steppers was relatively painless, as it was typically paid from equity.

“Over the last five years or so, house prices have fallen back, and for many, Stamp Duty would have to be saved for, proving impossible for some.”

Thompson said that the lack of mobility in the housing market had led to less choice of housing for first-time buyers and as such had contributed to the country’s current lack of supply.

He said: “At a time when housing demand is increasing, and is now starting to put some upward pressure on house prices, thereby making that first purchase in some areas out of reach for many.

“Overall we need to see reduced costs for those wishing to buy and move, in order to create a more mobile and healthier housing market.

“Alongside this we need to see increased housing construction, thereby addressing the current and increasingly important problem of housing supply, and keeping prices within reach of first timers, as well as helping with economic growth and job creation.”


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