This amounts to £7,500, an additional £5,000 when compared to the 1% band, stamp duty for a home costing £250,001, according to figures drawn up by haart estate agents.
The firm’s latest report also shows that the acute shortage of supply is easing as new homes for sale increase 5% annually and new buyer demand falls by 1.8%.
The June report also shows that property prices were up 1.9% month on month and 9.9% year on year taking the average price of a house to £204,429.
But on London the figures have soared, up 5.8% month on month and 20.3% year on year, taking the average prices of a home in the city to £490,595.
Prices seem to be having a knock on effect on the market with house sales down 0.7% month on month but up 9.2% compared with June 2013. Viewing are also down. Month on month viewings dropped 6.3% but are up 7.1% compared with a year ago.
Paul Smith, chief executive officer of haart, the UK’s largest independent estate agent, with a network of over 200 branches, said that if national property prices continue to increase at their current rate, the average price of a UK home will fall within the 3% stamp duty tax bracket before the end of 2016.
‘This means buyers forking out at least £7,500 on top of other costs when moving home. Where a property tips over into this 3% tax band, an extra penalty of at least £5,000 is incurred on any property priced over £250,001,’ he explained.
He pointed out that stamp duty bands have not moved upwards in line with house price inflation, a fact that successive governments have benefited from to the tune of £4.7 billion for 2012/2013. First time buyers, who pay an average £154,645, have no relief as they are already in the 1% stamp duty band.
‘The government, and the Bank of England, need to be careful not to overcool the market and by raising the stamp duty tax threshold could help keep the market fluid,’ added Smith.
He also pointed out that the new Mortgage Market Review measures are having an impact, but the new affordability tests and stricter scrutiny are applied at an early stage which means that only realistic buyers are considered and unrealistic ones are filtered out of the process quickly.
‘This explains the fall in buyer registrations by 1.8% annually UK wide but this is really a fall in unrealistic mortgage applicants being able to progress with no accompanying dip in average property prices or in annual UK sales. These are the first signs of the market undergoing a natural, cathartic process of self correction,’ he concluded.
