Homeowners need to set aside 20% of income to pay stamp duty, say experts

The average home buyer in nearly one in three of local authorities needs to set aside over 20 per cent of their average income to pay the stamp duty bill associated with buying a new home, according to mortgage experts.

Research from Halifax reveals that in 2002 the average stamp duty bill was equivalent to more than 20 per cent of average annual full-time earnings in only one in 20 of local authorities.

Martin Ellis, chief economist at Halifax, said: “A growing number of home buyers are paying the equivalent of more than 20 per cent of local average annual earnings in residential stamp duty.

“This trend is most prevalent in the south of England. But, other parts of the country are being affected as well,” he added.

The average homebuyer in South Buckinghamshire paid stamp duty of £21,241 in 2007, equal to 49 per cent of average annual full-time earnings in the area – the highest proportion in the country.

Meanwhile, recent research from Halifax has shown that the number of owner-occupied households in England fell by 83,000 between 2006 and 2007.

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