Urgent call for stamp duty review

The average house price has broken the £250,000 mark for the first time ever, it is revealed today.

It means that buyers of a typical London house now have to pay £7,500 in stamp duty.

The record was achieved following a 0.7 per cent house price increase last month, after a similar rise in April. The average price now stands at £250,300, which means that the average home buyer must now pay stamp duty not at one but at three per cent. Jeremy Leaf, London spokesman for the Royal Institution of Chartered Surveyors, expressed his concern at the current trends.

He said: "It is frightening that in London prices have reached a level that could be a deterrent, especially to first-time buyers.

Having to pay stamp duty at a level that cannot have been intended to hurt the lower end of the market is making a bad situation even worse. The time has clearly come for the stamp duty thresholds to be urgently reassessed."

Peter Bolton-King, chief execuconfidence in property". Sales prices are still more than 4.5 per cent below asking prices, suggesting that buyers remain cautious in spite of the shortage of homes for sale, which has been pushing prices upwards.

The time it takes for a property to reach the offer stage is steady at just under four weeks and the number of viewings for each property prior to sale is still about 12.

This indicates that buyers are shopping around before making an offer.

John Wriglesworth, Hometrack's

housing economist, said: "The London market has definitely recovered from the slump it experienced in 2003.

"There has been a rise in incomes and a return of confidence - and bonuses - in the City, as well as mortgage lenders offering larger loans relative to household income.

"All have combined to sustain growing buyer demand.

"The prospect of increasing interest rates does not appear to have deterred purchasers, and neither has the prospect of paying higher stamp duty."