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Stamp duty pushes up cost of moving to PS8k.

SURGING stamp duty costs have helped to push the average expense of moving home to PS8,248, a report has found.

UK home owners spent PS6.6bn on moving home last year, marking a 27% year-on-year increase on 2012 as a result of increased moving costs and growing numbers of house sales as the property market recovers, according to the research by Lloyds Bank.

Lloyds said rising house prices have pushed more property sales into higher stamp duty brackets. It said stamp duty costs, estate agency fees and legal fees have all grown by around 7% over the last year, while surveyors' fees and removal costs have remained broadly unchanged.

The average spend on stamp duty and estate agency fees now stands at PS2,001 and PS3,601 respectively, the report found.

Higher house prices in London and the South East mean the cost of moving there is around double the UK average, at PS20,825 and PS16,187 respectively.

Lloyds said the average home mover in London pays PS10,850 in stamp duty costs and PS6,510 in estate agency fees and the cost of moving equates to nearly (47%) of the average wage in the English capital. In Scotland the average moving cost is PS6,219 and in Wales it is PS7,395.

Northern Ireland was named as the most affordable place to move, where the average cost is PS4,253, or 15% of average earnings there.

Across the UK, the cost of moving is around 25% of average earnings.

Marc Page, Lloyds Bank mortgages director, said: "The cost of moving can be an expensive one, and rising house prices have had an impact on this with more property sales now within higher stamp duty brackets.

"On top of the costs of moving, home movers also need to consider the costs involved with changing mortgages, such as product and administration fees."

According to figures released last week by the Office for National Statistics (ONS), house prices have leapt 9.1% year-on-year to a new average high of PS253,000.

Critics of the "slab structure" of stamp duty argue that it distorts the market. Sales of homes are free of stamp duty up to the value of PS125,000 and attract a 1% tax above this level and up to PS250,000.

Stamp duty is imposed on the total value of the property rather than just the portion of the price which is above the threshold.

A report published by the Tax-Payers' Alliance last year estimated that three in 10 homes will have moved up into another stamp duty bracket in five years' time.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Apr 23, 2014
Previous Article:Tougher mortgage rules warning to borrowers.

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