Stamp Duty boost for most buyers
The average homebuyer is £4,500 better off under the new structure of Stamp Duty introduced last year by Chancellor George Osborne, according to Halifax.
The lender has worked out that since the changes came into force a year ago the typical homebuyer has paid a total of £3,676 in Stamp Duty, (based on the current average house price in England and Wales of £273,531).
This is a massive saving of £4,529 compared to the £8,205 that a buyer paying the same price would have had to pay under the previous flat structure.
But not everyone saves.
The ‘tipping point’ price, according to Halifax, is £938,000, when a buyer is worse off under the new progressive Stamp Duty structure. And sales at this higher end of the market have dropped since the new tax regime was introduced.
Sales above £925,000 – just below the ‘tipping point’ – in the first six months of 2015 were 10% lower than in the first half of 2014. Sales above £1.5m, which are more affected by the changes, have seen a bigger impact with a 20% decline; twice the size of the fall in the wider market.
At the other end of the spectrum, nearly 32% of all purchases by first-time buyers were below the £125,000 threshold at which Stamp Duty becomes payable, from August 2015 to October 2015.
Craig McKinlay, mortgages director at Halifax, said: “The changes made to Stamp Duty a year ago have been of significant benefit to many buyers. Only those purchasing the most expensive homes are worse off. There is some evidence that the top end of the market has been adversely affected by the changes with sales over £1.5 million falling by twice as much as the market as a whole.”