65% of homes now exempt from Stamp Duty

Since the threshold at which Stamp Duty becomes payable increased to £250,000 at midnight, two-thirds of properties in the UK are exempt from the tax when purchased by first-time buyers.

According to property website FindaProperty.com., 43% of homes currently up for sale cost between £125,000 (the former starting threshold) and £250,000, and first-time buyers purchasing in this range will make substantial savings.

The website calculates that the total saved as a result of the increase in the threshold will add up to £320,625,000.

Across the UK, all regions exempt London and the South East have average house prices of under £250,000.

Nigel Lewis, property expert at FindaProperty.com, said:

“We applaud this much sought after change to the Stamp Duty threshold which will not only benefit first time buyers but, because the property market is cyclical, will also benefit those at other stages of the property ladder in many regions.

"This is a significant move which will aid the ongoing property market recovery into 2010 and beyond and make a significant difference to the affordability of first time buyers.”

Meanwhile e.surv Chartered Surveyors, the UK’s biggest property valuer, revealed that up to 1.5% of the properties in the UK housing stock could be affected by the increase in Stamp Duty payable on properties valued at £1m or over.

The rate payable on purchase of a £1m property will increase from 4% to 5% next April.

Alison Traversoni, Chief Operating Officer at e.surv, said:

“No doubt the proposed increase of Stamp Duty to 5% on properties worth over £1 million will have an impact on the upper end of the market.

"However, this is a beneficial tactic for encouraging first-time buyers onto the property ladder.

“The reintroduction of the Stamp Duty exemption for first-time buyers is a very welcome initiative. We know from the previous Stamp Duty suspension that this did drive transactions at the lower end of the scale and these are fundamental to supporting the whole market.

"The measure will encourage new buyers into the market and increase activity levels; if there is any corresponding improvement in the availability of mortgage funds, this could set the market more firmly on the route to recovery.”

However, the impact of the Stamp Duty changes will be felt to varying degrees in different parts of the country.

First-time buyers in London and the South East will benefit least from the increase in the starting threshold for Stamp Duty, as so many properties in these areas cost more than £250,000.

And property website Zoopla points out that 81% of properties worth £1m or more are also located in London and the South East, four fifths (81%).

It calculates that the capital is home to 57% of all property millionaires, with the largest share residing in Kensington (W8) where 48% of all properties are worth over £1m.

Outside the capital, Virginia Water in Surrey leads the property millionaire stakes, with 28% of homes in the area worth more than a million pounds, compared to a national average of just 0.88%.