IF property prices continue to rise at their current rate, haart estate agency is warning that average house prices in Ruislip will be pushed into the next stamp duty bracket before the year is out. That would cost buyers at least £5,000 more in tax.
According to the most recent Land Registry data (for June 2014), the current average house price in Ruislip is £469,042, in those postcodes covered by haart’s High Street branch.
Once prices surpass £500,000, stamp duty increases from 3% to 4% of the purchase price.
With a 9.42% year-on-year increase in property prices, it will be a matter of months before the average price tips into the next stamp duty bracket if current growth rates continue.
Ruislip haart branch manager Tim Buckley said: “Stamp duty bands have not moved upwards in line with house price inflation, with successive governments benefiting by billions of pounds.
“The Government and the Bank of England need to be careful not to overcool the market and should raise the stamp duty threshold, to benefit buyers and sellers alike.”
According to haart’s monthly property Index, which uses branch data, the number of people registering to buy with the Ruislip branch in the quarter to the end of July fell by 42.62%, compared to the previous quarter.
Mr Buckley said: “Mortgage criteria is now far more stringent, with prospective purchasers under closer scrutiny as to whether they can afford the cost. This means that only realistic buyers are considered and others are filtered out of the process sooner.
“We have also found that, due to the current uplift in the market, if first-time buyers are going to a bank for their mortgage the process is taking a lot longer.”
Stamp duty starts at 1% on properties between £125,000 and £250,000, rising to 3% on sales up to £500,000 and 4% on homes up to £1m.