Three-quarters of first-time buyers pay Stamp Duty
Stamp Duty was paid by 74% of first-time buyers last year, significantly more than the 53% paying the tax 10 years ago, according to Yorkshire Building Society.
The mutual is calling for the tax to be reformed in next week’s Budget, saying it is prohibiting first-time buyers and should be altered.
The proportion of first-time buyers able to find a home under the Stamp Duty threshold has almost halved in just a decade, as first-time buyers (FTBs) increasingly struggle to find properties under £125,000. Latest figures show that in 2016, just a quarter (26%) of FTBs bought properties worth under the Stamp Duty threshold of £125k, down from 47% in 2006.
Yorkshire Building Society has called on the government to reform the tax in this year’s upcoming budget by making it a seller’s tax.
The mutual said that its proposal is that it would eliminate the cost of the tax for first-time buyers while helping those moving up the ladder.
With Stamp Duty being paid by the property seller, first-time buyers in the UK could save an average of £3,625, while Londoners could save £13,171. Those moving up the property ladder could save an average of £4,154 across the UK, and £9,762 in London.
Andrew McPhillips, chief economist at Yorkshire Building Society, said: “In its present form, Stamp Duty does not suit today’s housing market – it pushes up costs for those looking to buy, exacerbating affordability issues in a market where prices have vastly outpaced wage growth.
“Levying the charge against sellers rather than buyers will help to reduce costs for first-time buyers, helping more people to get on the property ladder. It would also help those moving up the property ladder, enabling them to move to a more suitable property and potentially freeing up smaller homes for first-time buyers to purchase.”