Eight in 10 London FTBs pay stamp duty vs 1 in 10 Northerners Mortgage Finance Gazette

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Eight out of 10 first-time buyers in London pay stamp duty, compared to fewer than one in 10 in the North of England, new analysis has found.

Zoopla looked at first-time buyer enquiries to properties listed by estate agents and housebuilders across the country and calculated stamp duty based on the asking price.

Across England as a whole, it found that four out of 10 first-time buyers pay stamp duty.

But the research highlights a stark North-South divide between the first-time buyers liable for the tax and those who escape it, due to house prices.

Nearly 80% of first-time buyers in London pay the tax, while around half do so in the South East and East of England as average purchase prices exceed the £300,000 first-time buyer relief threshold.

In contrast, just 2.1% of first-time buyers in the North East pay stamp duty, rising to 3.8% in Yorkshire and the Humber, 6.2% in the North West and 9.3% in the West Midlands.

Zoopla says if the threshold had increased in line with house prices it would now stand at around £380,000, potentially saving buyers purchasing between £250,000 and £380,000 up to £6,500 in stamp duty.

Executive director Richard Donnell says: “Where you are buying determines what you pay in stamp duty if you’re a first-time buyer.

“In the North and Midlands, the £300,000 threshold takes nine in 10 first-time buyers out of paying anything extra to buy their home.

“In London and the South East, the cost of buying an average first-time buyer home is above £300,000 for many buyers, which means the majority of first-time buyers face a stamp duty bill on top of an often sizeable deposit.

“For home movers, stamp duty is a near-certain cost wherever you live – and in southern England it runs to five figures.

“Six in 10 property purchases are made by existing homeowners.

“When the cost of moving becomes a meaningful friction, some of those moves don’t happen, especially with lower levels of house price inflation in recent years across southern England.”