Only half of first time buyers realised that this was an additional expense after beginning the mortgage buying process — highlighting that stamp duty isn’t factored into initial budgets:
* One in four discovered that stamp duty could delay their attempts to get on the property ladder when they were shopping around for their mortgage
* One in 20 realised stamp duty would have an impact on their budget only after they had spoken to their solicitor
* One in 20 only discovered the cost of stamp duty after they had received their mortgage offer
The research findings also highlight a generational divide of those concerned about the cost of stamp duty - only one in 15 (6.5%) of those who bought their first house 30 years ago said that stamp duty was an issue, compared to more than four times as many (30%) first time buyers looking to buy within the next 12 months.
Stephen Leonard, Director of Mortgages at Alliance & Leicester comments: "Alliance & Leicester’s findings show that the cost of stamp duty is a real issue for first time buyers. There are more than four times as many first time buyers today who view stamp duty as a challenge to buying a home, compared with 30 years ago."
Worryingly, for those potential home owners who are looking to buy a property within the next 12 months, just under two thirds (63%) have not even thought about paying stamp duty, and almost a third (30%) don’t even know what it is. This will inevitably lead to disappointment for some who eventually realise the budgetary significance of this extra cost.
Stephen Leonard continues: "Clearly home movers, especially first time buyers, view stamp duty as prohibitive. However, with thorough research and planning, stamp duty needn’t be an obstacle to moving into your dream home. First time buyers especially need to do their sums and know the total cost of buying a house. As more properties fall within the higher stamp duty bands, the more important it becomes for potential home owners to realise that stamp duty is a sizeable proportion of the overall cost and take it into account at the outset. Alliance & Leicester’s advice to those looking to buy a property for the first time is ‘forewarned is forearmed."
Alliance & Leicester Mortgages’ findings reveal that the nation’s first time buyers are becoming increasingly affected by stamp duty as house prices continue to rise. In the South West 15% of first time buyers are affected by stamp duty, in London the figure is 14% and in the South East 13%. These areas were hardest hit by the financial implications of stamp duty indicating that it likely to be directly related to property prices as these areas generally have the highest prices in the country.
