Leading local estate agent, Mullucks Wells has given its support to the latest study from a housing campaign group, which indicates that that people are being prevented from moving house by the rising cost of stamp duty.
According to the report from the Homeowners Alliance, the average cost of the levy paid on the purchase of property in the UK has risen 10-fold since 1995, from £532 to £5,957. The increase is seven times higher than the rate of inflation and almost five times more than house prices have risen in the same period.
Director William Wells from Mullucks Wells says, “The Homeowners Alliance is saying what we’ve been saying for years. Namely, that the unreasonable rate of stamp duty is the single biggest issue preventing people from moving home. It’s a levy which in effect removes the next rung of the property ladder and stops many potential buyers from going any further. In short, it’s a tax on aspiration.”
The report shows that if stamp duty thresholds had risen in line with house prices, the £250,000 threshold would now be more than £600,000 and the £500,000 threshold would have been lifted to £1.2 million. In 1997, the government made just £830 million from residential stamp duty. A decade later, it was eight times higher, at £6.86 billion.
William Wells added, “Back in the mid 1990s, stamp duty equated to just over one week’s average earnings. Nowadays, it’s more like three months wages for most people. And at the bottom of the market, it’s extinguishing the hopes of First Time Buyers, who have yet to get on the property ladder at all.
“The trouble is, stamp duty has now become such a major source of revenue for the Government, they are so reluctant to consider changing it. But ironically, if rates were reduced, we believe total revenues could be increased, as people would feel more encouraged to move house. Rather than tax a few home-movers to the hilt, many could pay a smaller amount and actually bring in more cash for the Treasury.”