Last year’s increase in the nil rate band of stamp duty does nothing to help average FTBs with house prices showing rises again in February after stagnating over the turn of the year.
AWD Moneyextra’s Monthly Mortgage Market Monitor shows the average property value being searched on Moneyextra.com in February by FTBs was £169,1821. With Stamp Duty Land Tax (‘stamp duty’) imposed at one per cent on properties worth between £120,001 and £250,000 that creates a tax bill of £1,691.82.
The increase in the nil rate band of stamp duty to £120,000 in Budget 2005 is no comfort to most FTBs because of the way the tax is imposed. Buy a property over the threshold and you face a tax bill based on the full value of the property not the amount by which it exceeds the nil rate band.
There is already talk that, having raised stamp duty rates four times in his first four budgets, the Chancellor may return to the tax and increase the top rates again.
Robin Amlôt of Moneyextra.com commented: "Gordon Brown could put thousands of pounds back into the pockets of hard-pressed FTBs at the same time but the chances are he won’t."
The average mortgage being sought in February on Moneyextra.com was £127,846, up 3.39 per cent on year-ago levels. The average mortgage value completed by AWD Moneyextra customers in February 2006 was £140,716.97.
The most popular mortgage lender in February this year, for the first two months of 2006 and indeed for 2005 as a whole was Nationwide Building Society. However, mutual lenders no longer dominate the tables, Nationwide is one of only two mutuals to make the top ten in February, the other being Stroud & Swindon Building Society.
