London Property Purchases Account for One-Third of All Stamp Duty Collected

A study conducted by Access Legal, a law technology specialist, has revealed a major disparity in the amount of stamp duty being paid back to home buyers in some regions of the country compared to others. Having analysed average stamp duty payments across 100 major towns and cities, Access Legal found that almost two-thirds of total UK stamp duty contributions come from just one region.

Over the six months following the return of regular stamp duty rates, the Treasury collected £679 million in stamp duty payments from these 100 towns and cities. Of which, approximately £442 million was generated entirely from property sales in London.

Bristol came in at second place with a comparatively paltry £19.1 million in stamp duty contributions, followed by Reading with a combined £9.78 million in stamp duty bills.

The top five stamp duty land tax contributors were rounded out with Cambridge and St Albans.

Londoners paying more than £26k for SDLT

Given the disproportionately high property prices in and around London, it came as no surprise that home purchases in the capital carried the highest stamp duty payments. On average, property purchases in London were found to have a stamp duty requirement of £26,133.

The second and third most expensive stamp duty regions of the UK are St Albans and Oxford, where home buyers can expect to pay £21,213 and £18,976, respectively.

Access Legal also found that all 10 of the top-paying stamp duty towns and cities were in the south, while all 10 lowest-paying towns and cities were in the north. Specifically, total combined SDLT contributions were found to be the lowest in Blackpool, Hartlepool, Bradford, Hull, and Sunderland.

The temporary stamp duty holiday came to an end some time ago, but there is still an exemption on property purchases up to a value of £300,000. Given the major differences in average house prices across different regions of the UK, it comes as no surprise that stamp study contributions also vary significantly from one area to the next.

In Blackpool, for example, the average stamp duty payment on properties purchased over the six-month period was just £341.

Demand remains high, outstripping available inventory

Commenting on behalf of Legal Bricks, a leading conveyancing software provider, director Mike Connelly suggested that the withdrawal of the stamp duty holiday has had little to no impact on buyer demand.

“We all know that buyers pay a premium to live in the South East, especially London, but the figures show just how much they’re paying in stamp duty tax alone compared to people in other parts of the country,” he said.

“First-time buyers, in particular, who also have to pay thousands of pounds in SDLT, will see a real dent in their deposits or have to borrow more on their mortgage to pay it. This suggests that even with the SDLT holiday coming to an end, demand for housing in some parts of the country has continued to be high.”

Meanwhile, mortgage expert at Mojo Mortgages, Claire Flynn, praised the temporary stamp duty holiday for helping many first-time buyers find their way onto the UK property ladder.

“The stamp duty holiday was good news for many, seeing house sales reach record levels and helping to alleviate some financial pressure of buying a property for first-time buyers and existing homeowners,” she said.

“While first-time buyers still benefit from an exemption on properties up to £300,000, house prices are currently at record highs, which means we’ll likely see a considerable increase in the number of new homeowners paying for stamp duty.”

“This will be exacerbated by the end of the help-to-buy scheme in March 2023, which could make it even more difficult for those trying to get their foot on the property ladder in areas such as London, Bristol, and Reading where the average cost of a home exceeds the £300,000 exemption threshold.”