Londoners miss out on stamp duty change

Only one in 20 London housebuyers will benefit from Gordon Brown's decision to double the stamp duty threshold to £120,000, experts claim today.

The Chancellor announced in his Budget that the change was meant to help "hard-working families".

But independent bodies said the measure would do little for firsttime buyers, especially in London. They say the rise in house prices mean Mr Brown is still in line for an increase in stamp duty receipts.

An analysis by Alliance and Leicester found Londoners gained least from the changes, with only five per cent of homes bought in the capital under the new threshold. Ten years ago, with the threshold at £60,000, 37 per cent of Londoners escaped the duty.

Stephen Leonard, the bank's director of mortgages, said: "With the average house price for the first-time buyer at £145,408, a stamp duty threshold of £120,000 will still find first-time buyers struggling to meet the burden of this tax."

That was echoed by the Royal Institution of Chartered Surveyors, which said the Chancellor should have raised the threshold to £150,000. "In London and the South-East, where affordability constraints are greatest, the change in the threshold will have little impact," said William Tew, head of property policy.

Bradford & Bingley building society said: "The lift falls short of what could be reasonably expected, given the level of house price inflation over recent years.

"The doubling of the threshold is certainly a move in the right direction but it won't offer respite for all potential homeowners and we certainly wouldn't want to wait another 12 years before the Chancellor reviews it again." The Conservatives said that if Mr Brown had increased the threshold in line with houseprice increases it would now be £143,000.

The concerns came as research by the Evening Standard found it is possible to buy a property in the capital within the new threshold - but only just.

Out of the 150,000 homes currently for sale in London, there are probably fewer than 3,000 for £120,000 or less. The Evening Standard identified a selection of flats - admittedly small - in converted houses. They include: