Halifax, the UK's fifth largest bank, has written to MPs and members of the Scottish Parliament, warning that first-time buyers in 98 per cent of the UK's constituencies are now paying stamp duty, compared with just 13 per cent of constituencies a decade ago.
In a letter to 800 politicians and UK "opinion-formers", Halifax said that the average first-time buyer in 619 of the 633 constituencies surveyed was now paying more than £60,000 - above which a 1 per cent stamp duty charge is levied. Properties over £250,000 are subject to 3 per cent, while homes over £500,000 are charged at 4 per cent.
Ten years ago, shortly after the stamp duty thresholds were last changed, the average first-time buyer paid less than £60,000 for their first home in 13 per cent of the country's constituencies. But since the stamp duty threshold was last set, in March 1993, the average price of a house in the UK has risen more than 160 per cent.
However, the Treasury has persistently resisted calls to raise the thresholds, and now collects about £4bn in stamp duty through residential property sales every year; this represents four times more than at the peak of the last housing boom in the late 1980s.
Halifax says while the Government received just 50 per cent of its stamp duty income from residential sales in 1990, and the rest from commercial property, residential now accounts for 76 per cent. Martin Ellis, the chief economist at the Halifax, said: "The lowest threshold for paying stamp duty has remained the same since 1993, even though house prices have risen by 160 per cent during this period.
"That is why we are sending a pamphlet about the need for stamp duty reform to about 800 key policy-makers, including all MPs. We believe that the major parties should redress this issue and remove some of the burden on young buyers who are trying to enter the property market."
Halifax says that an increase in the minimum stamp duty threshold to £150,000 would cost the Government just £570m, while a rise to £100,000 would cost just £210m.
The bank is calling on the Government to raise the threshold to £156,900 to take account of house-price inflation since the last rises - a move which it says would cost the Government about £600m. It also wants the limits to remain pegged to future house-price inflation.Reuse content