An analysis of homes on sale six months after the scrapping of the ‘slab’ system of stamp duty has revealed a dramatic change to agents’ and vendors’ asking prices.
The study, by the Nationwide Building Society, shows much less bunching around the old stamp duty thresholds of £125,000, £500,000 and in particular the £250,000 price points.
“Based on the first six months of transactions data from the Land Registry, nearly 235,000 purchasers in England and Wales have paid less tax under the new regime, with an average benefit of [about] £1,800” explains Robert Gardner, Nationwide’s chief economist.
“The benefits are greatest in the south of England where average house prices are higher. We estimate that around 85 per cent of transactions in London, the south west and the south east have benefited from the changes, compared with around 55 per cent in the north, Yorkshire and Humberside, and the north west of England” he says.
But Nationwide also estimates around 5,000 purchasers over the past six months - that is about two per cent of all buyers - have paid more stamp duty. Two thirds of these were in London, with an average of £28,000 more tax being paid compared with the old system.
“On balance - considering the net effect of those paying more and those paying less - we estimate that the changes have resulted in around £275m less tax being paid than would have been the case under the old stamp duty regime” says Gardner.