Propertymark has urged the UK Government to reform stamp duty thresholds to reflect current house prices, as changes to the tax take effect from today.
The professional body warns that many homebuyers will now face an increased financial burden, potentially dampening market activity.
Toby Leek, President of NAEA Propertymark, says: “There will be many people completing on the sale of their home today to save potentially thousands of pounds from tomorrow onwards.
“Some will also be disappointed that they were unable to complete quickly enough to avoid paying extra Stamp Duty, leaving many with an additional burden of around £2,500 on average.”
INCREASED COSTS
While Leek acknowledges that property prices may adjust slightly to absorb the increased costs, he remains optimistic that improving mortgage conditions will help maintain affordability.
And with mortgage rates below 4% now appearing on the market he says that prospective buyers could still find opportunities to move, particularly as the housing market enters its traditionally busier summer period.
However, Propertymark has expressed concerns that stamp duty remains a significant barrier to homeownership, particularly for first-time buyers.
The rising cost of deposits, now averaging around £50,000, continues to push homeownership further out of reach for many aspiring buyers.
REVIEW VALUE BANDS
Leek adds: “The UK Government needs to urgently review the stamp duty value bands to reflect average property prices.
“Any current or future measures to help first-time buyers, including saving ISAs, must be fit for purpose and take house price inflation into account.”
Propertymark’s call for reform comes at a time when affordability remains a key issue in the UK housing market. Industry experts argue that modernising stamp duty thresholds could provide much-needed relief, ensuring that more people can step onto the property ladder or move home without prohibitive costs.
COST OF MOVING UP
The latest analysis from Yopa has revealed that the initial cost of moving home has increased by as much as 13% over the last year alone, with England home to the highest moving cost at £51,826, driven by recent changes to stamp duty relief thresholds.
England is by far the most expensive nation to move home, with the total average cost coming to £51,826.
This figure has increased by 10.9% over the last year alone and whilst the average mortgage deposit of 15% is the largest cost incurred at £43,585, it’s the recent changes to stamp duty relief thresholds that have driven this increase in moving costs.
A year ago, the average home mover would have paid £1,433 in stamp duty. Prior to 1st April this year, this cost sat at £2,028, but with the government failing to extend relief thresholds beyond March 31st, the average cost of stamp duty now sits at £4,528 – a 216% increase versus last year.
CONVEYANCING COST UP
Conveyancing costs have increased by 12.5% annually, now averaging £1,364, with the average mortgage payment of £1,432 up 3% annually, whilst removal costs have increased by 1.3% to £917 on average.
At a total of £34,429, home movers in Wales face the second largest cost when moving home, with the cost of conveyancing (£1,228) the highest cost incurred after placing a mortgage deposit.
Conveyancing costs have also seen the largest increase across Wales at 9.5%, however, the nation has seen the smallest overall increase in the cost of moving of all UK nations at just 3.2%.
SCOTLAND SUFFERS TOO
Scotland’s version of stamp duty, or LBTT, is the moving cost that has seen the largest increase year on year, largely due to increasing house prices, up by 39%, with the average cost of removals also up 14.1%, although again, it’s conveyancing that costs Scottish homemovers the most after a mortgage deposit at an average of £1,163.
All in all, the average initial cost of moving home across Scotland now sits at £32,172, having climbed by 7.8%.
And whilst Northern Ireland is home to the lowest overall cost of moving at £31,353, this cost has increased by 13.2% over the last year – the largest overall increase of all UK nations.
EXTRA COSTS
Verona Frankish, Chief Executive of Yopa, said: “Homeownership doesn’t come cheap and house prices are the key factor behind the high cost of purchasing a home, with the value of bricks and mortar largely trending upwards over the last 30 years.
“Of course, a mortgage deposit alone isn’t enough to secure a property and there are a raft of additional costs that homemovers need to factor in when entering the market, such as stamp duty, conveyancing costs, mortgage repayments and even removals.
“The bad news is that, like house prices, these costs have increased pretty much across the board and total as much as £52,000 depending on which UK nation you’re looking to make your move within.”
Last month Property Soup reported how homebuyers paid £1.1bn in Stamp Duty in February, a 24% rise from the £848m paid in January, according to analysis of latest HMRC statistics by Coventry Building Society.
