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Consumer Home
05 July 2006
Extra housing costs such as stamp duty are further stretching affordability for first-time buyers, a new report reveals.
Although it is those in their 20s and 30s who are most affected by affordability problems due to high house prices, it is also affecting other age groups, with 23 per cent of over-50s either renting or living with parents.
Around 41 per cent of non-homeowner over-50s say that they would love to buy a house but cannot afford it, the report from Alliance & Leicester reveals, while 56 per cent of non-homeowners in their 20s and 58 per cent of non-homeowners in their 30s complain about house prices being beyond their means.
Despite the increase in the stamp-duty threshold in the Budget from £120,000 to £125,000, first-time buyers are still being stung by stamp-duty, making it even harder to buy a property.
In 2005, 41 per cent of first-time buyers were looking to buy a property costing over the stamp duty threshold of £120,000 and would have had to pay stamp duty, compared to 61 per cent of first-time buyers this year who want to spend more than £125,000.
Critics have called for an overhaul of the current stamp duty system, saying that it would alleviate pressure on many first-time buyers.
"Taking away barriers such as stamp duty would enable more people to get onto the property ladder because they would have more money to pay the loan," said a Building Societies Association spokesman.
The organisation has called for tax thresholds to be based on house price inflation, claiming that this would reduce cases of buyers being placed in higher tax brackets due to rising house prices.
If you are considering buying a property and want to take out a mortgage, you will be credit checked. Order your credit report first and make sure it's up-to-date and accurate.
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