Stamp duty weighs on home buyers in London
Londoners are being unfairly hit by stamp duty levels compared to home buyers in the rest of the country, according to new research.
Estate agency haart found that while the average salary in London is 24.6pc higher than the rest of the UK, homebuyers in the capital must pay stamp duty which is 750pc more than in the country as a whole.
This is due to sharply rising prices in London, which have for years outpaced increases in wages. Homes in London are 140pc more expensive than in the rest of the country.
The chief executive of haart, Paul Smith, has backed The Telegraph’s campaign to get the Chancellor Philip Hammond to review the stamp duty system. He has called for a stamp duty holiday for first-time buyers.
A report earlier in the week from the online property portal Rightmove found that the average price of homes typically bought by first-time buyers, with two or fewer bedrooms, is growing twice as fast as other, bigger homes.
Mr Smith said: “Unless the government acts now London will see a major ‘brain drain’ to the Northern Powerhouse, Midlands Engine or to the EU, where property is more affordable. It is wrong to penalise Londoners just because prices in the capital are so high, and we need a more balanced approach to stamp duty for first time buyers.”
London and the south-east of England together pay more than two-thirds of the UK’s residential stamp duty bill, with the capital footing the bill for 46pc of the total duty paid in England and Wales.
He added: “We need Theresa May to show a Thatcherite commitment to home ownership and bring about a first time buyer revolution - one that will offer young people a secure future and provide a welcome boost for the whole economy.”
This comes as new research by revealed that Conservative-run councils are less likely to grant planning permission for new residential developments.
The report, by peer-to-peer property funding platform Saving Stream, found that in the last year Conservative-run councils granted 75pc of applications, compared to 88pc in Labour-run councils.
This can be partly explained by the fact that Labour councils tend to be in urban areas where there is more brownfield land for development, whereas many of the Conservative councils are in regions where there is greenfield land, and therefore planning decisions are mroe controversial.
Reference: http://www.telegraph.co.uk/property/house-prices/stamp-duty-weighs-on-home-buyers-in-london/
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