Stamp duty should be “staggered”, expert claims

Banks would be encouraged to lend more easily to home buyers if stamp duty was changed to work like income tax, a mortgage expert has claimed.

Catherine Hearnden, director of MyMortgageDirect, said stamp duty should be calculated relative to the house being purchased.

“I think it should work like income tax, where it is staggered and increases relatively,” she said.

Stamp duty bands are currently set at £125,000, £250,000 and £500,000.

Houses under £125,000 incur a 0% tax, while those over £500,000 incur 4% stamp duty.

She added that first time buyers should come to terms with the fact that they’ll need a deposit saved up to buy a property.

“I think you must go back to the idea of saving for a deposit. Then I think people will take it more seriously,” she said.

Hearnden made the comments after the British Bankers’ Association (BBA) reported that the number of people who had their applications for a mortgage accepted by a high street bank dropped from 46,000 to 35,000 in January.

David Dooks, BBA statistics director, said bad weather was partly to blame for the lack of activity on the housing market.

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