A free toaster or free Ford Fiesta – how new stamp duty relief varies across the country

•    The average London buyer will save £14,289 thanks to the new stamp duty relief
•    …but those in the north-east will save just £38 on average
•    First-time buyers will only save money in London and the south-east

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“The massive reduction in stamp duty costs announced by the Government yesterday will benefit those in London and the south-east far more, where house prices are higher, while those in other regions of England will barely see a difference. Those in the capital will save on average £14,289 under the new scheme, based on average house prices, while those in the north-east will save just £38.

“The average house price in the north-east is £126,945, according to the latest Land Registry house price data, meaning it is only a shade above the current £125,000 tax-free limit – so homebuyers in the region will only save the cost of a toaster on their house purchase. In comparison, the average house price in London is just under £485,800, which means from today the average buyer will save more than £14,000 in stamp duty – the cost of new Ford Fiesta.

“First-time buyers fare worse and only those buying in London and the south-east will see any additional savings on top of the existing first-time buyers’ relief, on average. The current scheme means that anyone buying a first home worth £500,000 or less doesn’t pay stamp duty on the first £300,000. Only London and the south-east have average house prices above that £300,000 mark, meaning first-time buyers would benefit from the Government’s latest tax break. In the south-east on the average house price a first-time buyer will now save £1,167 in stamp duty, while in London at the average price they will save £9,289.

“While the stamp duty holiday is intended to get the housing market moving, these figures show that it’s likely to provide a far bigger incentive in the already affluent areas of London and the south-east and will have a much more muted impact in other areas of England. Dangling the chance to save less than a hundred pounds in tax isn’t likely to prove much of a push to get potential buyers out house hunting, while offering a tax break of thousands of pounds will have much more impact.”