UK Homebuyers Benefit by £1 Billion As A Result Of Changes to Stamp Duty

Average UK saving of £1,600 per house purchase as a result of the changes

30 March 2015

More than two thirds (69%) of homebuyers across the UK are likely to benefit from the new Stamp Duty regime, with 29% seeing no change and just 2% likely to pay more* according to data produced by Nationwide Building Society, the mutual which campaigned for changes to be made.

Based on 2013/14 transactions data (from the Land Registry, HMRC and CML Regulated Mortgage Survey) and assuming an average saving of c£1,580 across a total of 647,000 transactions benefiting from the changes, homebuyers in the UK could save £1 billion as a result of the Stamp Duty changes.

For homebuyers in England, Wales and Northern Ireland, the welcome introduction of a progressive Stamp Duty Land Tax system came into force on 4 December 2014, while for Scottish buyers the Land and Buildings Transaction Tax changes are to be implemented on 1 April 2015.

As a result, the average tax payable on the purchase of a home is likely to fall across the UK, with the average saving for each country (based on Nationwide’s analysis of Land Registry and Regulated Mortgage Survey data) projected to be:

(Gross) benefit Mean Total £m
England 1,603 912
Wales 1,219 24
Scotland 1,622 82
Northern Ireland 748 6

Graham Beale, Nationwide’s Chief Executive, commented: “It’s gratifying to see the changes that Nationwide campaigned so long for, making such a substantial difference to the pockets of homebuyers across the UK.

“With the implementation of the new progressive approach in Scotland just around the corner, buyers across the UK will now only pay for the amount of their property value over each new threshold, a victory for fairness and another encouraging step for all those considering a move on to or further up the housing ladder.”

For both England and Scotland, most likely to benefit from the changes are those looking to move up the housing ladder – though duty payable on properties over £330,000 will now be more expensive in Scotland than in England.

The potential effects on duty paying winners and losers will be –

Price point SDLT - Old system SDLT - England, Wales & N Ireland LBTT – Scotland
£200,000 2,000 1,500 1,100
£300,000 9,000 5,000 4,600
£400,000 12,000 10,000 13,350
£500,000 15,000 15,000 23,350
£600,000 24,000 20,000 33,350
£700,000 28,000 25,000 43,350
£800,000 32,000 30,000 54,350
£900,000 36,000 35,000 66,350
£1,000,000 40,000 43,750 78,350
£1,100,000 55,000 53,750 90,350

Impact analysis of new SDLT/LBTT thresholds & rates (based on 2013/14 activity)

Number of transactions Benefit No change Pay more
England 568,869 210,661 12,465
Wales 19,811 17,609 16
Scotland 50,716 33,834 4,570
Northern Ireland 7,810 12,332 8
UK 647,207 274,435 17,059

% of transactions Benefit No change Pay more
England 72% 27% 2%
Wales 53% 47% 0%
Scotland 57% 38% 5%
Northern Ireland 39% 61% 0%
UK 69% 29% 2%

*based on 2013/14 activity, according to transaction figures from Land Registry and HMRC

SDLT thresholds pre 4 Dec 14
Above Rate
£125,000 1%
£250,000 3%
£500,000 4%
£1,000,001 5%
£2,000,001 7%

New marginal SDLT thresholds
Above Rate
£125,000 2%
£250,000 5%
£925,000 10%
£1,500,000 12%

New Scotland LBTT thresholds (Apr-15 onwards)
Above Rate
£145,000 2%
£250,000 5%
£325,000 10%
£750,000 12%

Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

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