Cheap mortgages could offset stamp-duty woes
Wed, 10 May 2006
First-time buyers should secure a cheap mortgage to help avoid growing stamp-duty concerns.
Many people stepping on to the property ladder for the first time are worried that having to pay stamp duty land tax could be limiting their choices, according to the Council of Mortgage Lenders (CML).
The CML estimate that around 50 per cent of first-time buyers are forced to pay the tax, even though the threshold has been raised twice over the past two years, simply because house prices are still increasing.
"With half of first-time buyers having to pay stamp duty it is clear that tax continues to add to their affordability problems," said Michael Coogan, director general of the CML.
"Reform of stamp duty is long overdue. If it had been updated in line with house price inflation since 1997 the threshold would stand at £145,000, helping many more first-time buyers onto the property ladder and into their own homes."
The threshold has been raised from £60,000 to £125,000 but with the average home costing in excess of £190,000, many buyers are struggling. However, shopping around for a suitable cheap mortgage could mean some borrowers have excess funds to cover the tax in the long run. 
© Adfero Ltd
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