ALMOST a quarter of first-time buyers are not considering the cost of stamp duty before making an offer on their potential home, according to new research by TSB.
Alarmingly, one in seven people buying their second or third homes do not consider stamp duty either.
Encouragingly, many first-time buyers and established homeowners are well-prepared having calculated the exact amount to set aside for stamp duty. The research also shows that people's level of consideration of stamp duty varies quite significantly across Britain. Residents in the east of England, the south west and south east are stamp duty savviest, setting aside a specific amount to cover stamp duty.
The research also found the average stamp duty outlay exceeds £5,000, the equivalent of nearly a tenth of the average deposit. For those looking to buy their first home, the average stamp duty is equivalent to an even larger proportion (15 per cent of the average deposit). In fact, it can be such a large cost that almost one in ten homebuyers have capped their bid for a property in order to fall into a lower stamp duty bracket. The most likely to have done so are those living in London and the south east, who also face the highest average house prices in the UK.
A third of current homeowners said they did not pay stamp duty. This is in stark contrast to those looking to buy their first property as the majority expect to pay stamp duty.
Ian Ramsden, TSB's Director of Mortgages, says: "With UK house prices rising, it should come as no surprise that the cost of stamp duty is on the up too. Yet, a worrying number of homebuyers are failing to factor this significant outlay into the overall cost of buying a home. With the expenditure on stamp duty equivalent to a tenth of the average deposit, it is important for potential homebuyers to factor it in to their purchase decision at an early stage.
"Before starting their house-hunt, people should talk to a qualified mortgage adviser to see what options are available to them."