Chancellor fails first time buyers, says Nationwide

The Chancellor froze Stamp Duty at existing levels for housing and business properties. Nationwide believes that Stamp Duty is long overdue for review and should be revised to reflect today’s increased property prices.

Over 60% of first time buyers currently pay Stamp Duty at the starting level of £60,000.

When the Stamp Duty level of 1% at £60,000 was introduced in 1993, the average house price in the UK was just £51,000.

The current average price of a house has more than doubled since then and now stands at nearly £120,000.

Nationwide believes that the property price at which Stamp Duty is charged should have been increased to £100,000. This more realistically reflects the average price of a home in the UK which is £119,938 (Nationwide House price Index Quarter 1 2003). In 2002, 43% of properties bought by first time buyers were above £100,000. With the recent dramatic increase in house prices, getting on the housing ladder has become increasingly difficult. The unchanged level of Stamp Duty further compound this problem.

Philip Williamson, Nationwide’s chief executive said: “A review of Stamp Duty is long over due. The Chancellor has missed an opportunity to give first time buyers a better chance of getting on the property ladder. Back in 1993 first time buyers benefited from more realistic levels of Stamp Duty as well as mortgage tax relief. These days it is much more costly – the Chancellor has missed the chance to redress this balance.”