Ten years too long

The lobbying campaign for reform of stamp duty is gathering pace ahead of the pre-Budget report in November.

The Council of Mortgage Lenders (CML) published figures today showing that the proportion of first-time buyers paying stamp duty has risen from 48% to 56% in the last year. The CML did not say what action it wanted the government to take.

The Halifax was much more explicit in a survey last week listing 79 towns where the average house price is over £250,000, where stamp duty rises to 3%, making the average bill at least £7,500.

Halifax chief economist Martin Ellis said:

‘We call on the government to increase the higher stamp duty thresholds in line with the increase in house prices since 1997. We believe the government should commit to index link all the stamp duty thresholds to house price inflation in the future.’

Like its similar campaign on inheritance tax, the lobbying relies on persuading the chancellor to change a system that has brought him billions of pounds of extra tax revenue since 1997.

What you won’t be hearing of course is a comparison between the taxation of housing – up to 4% each time you move, the same rules on inheritance as anything else, plus the council tax – and any other form of investment.

The CML survey also reveals that first-time buyers now account for just 35% of loans for home purchase and that interest payments now take up 17.1% of their income. Is the solution to that really to lower stamp duty for everyone (including buy to let investors) and reinforce a situation where only those with help from their families can afford to buy?