Stamp Duty Set To Triple? It's possible say Bournecoast

March 13, 2013 - PRLog -- BOURNECOAST, Bournemouth’s Buy to Let (B2L) specialists say that 10% of property owners are teetering on the edge of the Stamp Duty threshold.

According to a report in industry media released today, around 80,000 people in England and Wales could find themselves paying triple Stamp Duty as the average property price looks set to breach the £250,000 mark.

Stamp Duty Land Tax (SDLT) will jump up from 1% to 3% which in monetary terms sees a massive jump from £2,500 to £7,500.  The call is for government to urgently re-evaluate the 1% Stamp Duty ceiling which has remained unchanged for over 15 years whilst the average price of a house has increased trebled from £79,242 to £249,958.

Stamp Duty was first introduced in 1984. Then, an average priced property of £29,106 incurred no SDLT and properties over £30,000 were subject to a 1% charge. However, thirteen years later, ‘stepped’ bands were introduced and despite the increase in property prices the point at which the tax jumps from 1% to 3% has remained at £250,000.

Simon Tebbutt, Business Development Manager at Bournecoast said: “HM Land Registry shows that despite a depressed housing market, last year saw the average property price in the UK rise 0.75% to £249,958.  Should a similar slight increase occur again this year it would bring the average property price above the £250,000 threshold.

“If the stepping is not reassessed there are two possible scenarios:  A bunching will occur at £250,000 which will hinder the already fragile recovery of the housing market, depressing house prices with the frightening prospect for negative equity and even repossessions. Secondly, it will also prevent home owners from ‘trading up’  which is just a further blow to the generation of renters, for whom the average size of a deposit is now £67,488 - almost 8 times the average of £8,716 paid in 1997 when stepped Stamp Duty bands were first introduced.”

It is reported that the Government base their research on data from the Halifax and Nationwide, who collectively only represent a third of the mortgage market. These are mainstream high street lenders whose analysis puts average prices well below the actual averages demonstrated by HM Land Registry.

Simon added, “With the March Budget looming, we hope that changes to Stamp Duty will be high on the Government’s agenda although rumours abound that, rather than re-evaluating the £250,000 threshold, The Chancellor may increase Stamp Duty by 1% across the higher bands as an additional revenue raiser and populist pleaser.

“Increased SDLT across these price bands would be bad news for the economy and property market. Mr Osborne must move quickly to re-evaluate the UK’s Stamp Duty situation. A recovery in the domestic property market will only be good news if the 1% Stamp Duty ceiling is also raised. For any buyer, finding an additional £5,000 at best challenging - especially in the current climate - and for first time buyers, it could mean the difference between renting and owning. The Government should not continue edging up Stamp Duty percentages without taking into account rising property prices, inflation or the impact on transactions, which have fallen by 33% since 1997.

-          ENDS  –

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Background:

In 2010 Bournecoast celebrated it’s 50th anniversary and has been family run since it’s inception when it was established by Major & June Webb in 1960.  Keith Simmons MBE, the previous managing director and Major Webb’s son-in-law, was then joined by his son and daughters, Des Simmons, Veronica Strongman and Anita Smith, who now run the company with a team of seventeen staff.

Bournecoast Property Agents have extended their skill base within the ever changing property market.  

Over the past 50 years Bournecoast has invested in a skilled – and award winning - workforce, ensuring each member of the team enjoys dealing with people and property whilst ensuring their knowledge of the whole property market is second to none, providing advantage over most local agents.

Issued by:

Alex Eaton

Chartered Marketer

Marketing

Bournecoast

alex@bournecoast.co.uk

01202 437888