Thursday, 19 October 2017

Government considering new regulatory body for leasehold rentals

Plans for new measures regarding leasehold tenancies to help create “a fairer property management system that works for everyone” have been unveiled by the government.
Communities Secretary Sajid Javid has announced that the government is considering whether a “new independent regulatory body” is required to handle leasehold and private rented management, and letting agents.
A statement from the Department of Communities and Local Government this morning says: “While the sector is partly self regulated - through professional bodies such as the Association of Residential Managing Agents (ARMA) and ARLA Propertymark (formally Association of Residential Letting Agents) which have a code of conduct - other property agents operate outside of any system and can provide a poor deal for consumers.”
Javid has told the ARMA conference this morning: “This is supposed to be the age of the empowered consumer – yet in property management, we’re still living in the past. Today we are showing our determination to give power back to consumers so they have the service they expect and deserve, as part of my drive to deliver transparency and fairness for the growing number of renters and leaseholders.”
Now the government is going to contact lettings organisations to seek views on:
- whether regulatory overhaul of the sector is needed;
- measures to protect consumers from unfair costs and overpriced service charges
- ways to place more power in the hands of consumers by giving leaseholders more say over their agent;
- a possible new independent regulatory body for leasehold and private rented management;
- how consumers can be empowered in the market, including whether leaseholder tenants should have a greater say over the appointment of managing agents;
- how transparency can be increased in the system so that tenants and leaseholders know what they are being charged for and why;
- "ensuring fairness and openness around relations between freeholders and agents";
- looking at what qualifications are needed by agents to practice and how regulation can be improved.
Javid says that with over 4.2 million leasehold homes in the country and service charges reaching between £2.5 billion and £3.5 billion a year, the government is determined to fix the problems in the property management industry, drive down costs and protect consumers from the small minority of rogue agents.
“The problem isn’t just for leaseholders, but for some of the 4.5m tenants in the rental sector too – with overcharged costs for repairs and services often passed down to tenants.
Since 2010, government has taken action to require all letting and management agents to belong to a redress scheme, and we have introduced a range of tougher measures to target rogue landlords and agents in the private rented sector” he adds.
Anecdotal evidence of poor management cited by Javid included:
  • a group of leaseholders charged ten times the market rate to have a new fire escape fitted – with the £30,000 contract handed to the freeholder’s brother
  • one landlord charged £500 by his agent for repairing a shower door
  • a London-based property agent who tried to charge a leaseholder almost £5,000 to transfer ownership of a parking space to other leaseholders
The call for evidence consultation period will last for six weeks from today.

What does the London property ladder look like now?

The property market has changed and the buying habits of home buyers have changed with it. Here are the five key stages in 2017.


The London property market has changed beyond all recognition in the past eventful decade and Londoners' expectations have had to change with it.
Successive stamp duty changes have increased the cost of moving home and investing in property, while stratospheric price rises means there are now far fewer rungs on the ladder than in the past, with many no longer able to rely on the equity in their current home to make their next purchase. 
Here we look at the five key rungs on the property ladder now, and how buyers can get there. 

FIRST-TIME BUYERS

Who are they?
With the average first-time buyer deposit in London hitting £100,400, very few can afford to buy anything within spitting distance of inner London, even with substantial help from the Bank of Mum and Dad, who are a shadowy presence in the background of many first home purchases, says Robin Chatwin, head of Savills south-west London residential. Buyers who aren't fortunate enough to have an enormous donated deposit must now seek out other routes to the first rung of the property ladder, be it Help to Buy or shared ownership.
Where?
The 21st-century first-time buyer has rippled their search out to the wider reaches of London. Chatwin's south-west London buyers are humouring their parents – who are footing almost all of that £100k+ deposit – by viewing flats in established Putney or Richmond. But Brixton is the ultimate goal, with the holy trinity of nightlife, good transport and green space. Balham, Clapham and Wimbledon will all do too. Otherwise, those without significant help from beneficent parents are seeking out the regeneration zones of the future before the diggers and Tube links arrive
What are they buying?
Two-bedroom flats close to public transport if possible. Not too long ago the first flat would be a two or three-year commitment, before cashing in on a healthy capital gain and probably a payrise and trading up the ladder. Nowadays, however, moving is expensive and the payrise is non-existent, so buyers expect to spend a good five years in their first home and need to account for all the life changes that may entail. And while first-time buyers might not start the buying process with the intention of becoming experts in the finer points of grouting, many of them get a bit of a shock when they see just what their budget will buy.
How much?
The first-timer’s budget starts at £300,000, says Chatwin, but for that they’ll have to get to know Tooting, or even Croydon, rather than Fulham or Clapham. With a very well-paid job and some serious parental help, the budget can sometimes stretch to £700,000, in which case they won’t struggle to find a nice two-bedroom flat anywhere in south-west London or across the capital.
ftbcomyn-road-0.jpg
£775,000: a two-bedroom, two-bathroom flat in Clapham
SECOND STEPPERS
Who are they?
Fast forward a few years from that first buy and many starter home owners have settled down, partnered up and may have at least one child running riot in that now nicely fixed up flat. While they may have thought that getting on the ladder was the most difficult thing to achieve, many would-be second steppers are now finding that moving up it in or near where they currently live in is nigh on impossible. And they're discovering that maybe it's not as essential as they once thought to be able to stumble home from the club in 10 minutes or less.  
Where?
Savills research shows net out-migration from London of those in their thirties rose 68 per cent between 2012 and 2016. Second steppers are seeking space and are quitting the capital to find it. Their jobs are still in the city, though, so their new digs must be an easy commute, meaning the Home Counties are getting a new lease of life. 
What are they buying?
If you’re moving out of London for a more family oriented lifestyle, you can’t beat a house with a decent garden in a pretty Chiltern village, says Chris Moorhouse, head of Savills Beaconsfield office. Penn is the archetypal traditional village with a village green, duck pond, deli, village shop, sports and social club, three pubs, two churches, and two junior schools. Other villages are less well equipped but you can get “about 10 per cent more house for your money.” The ideal house for this demographic is “probably an old rectory with a traditional character outside but iPhone-controlled lighting and Sonos inside,” Moorhouse says.
How much?
London leavers are saving an average of £246,655 by selling a London home and buying outside the capital instead. Many of those moving from expensive parts of inner London are likely to have a bigger budget to play with and are moving to spread out, rather than release capital. Moorhouse estimates that many of his buyers have between £1m and £4m to play with.
upsizelakes-lane-0.jpg
£1,375,000: traditional on the outside, modern on the inside at this family house in Beaconsfield
HOLIDAY HOME BUYERS
Who are they?
Living in London or the Home Counties these 40-somethings are looking for an easily accessible seaside spot. Their children are too young to need help buying their own place and still happy to spend sporty weekends windsurfing or sailing with their parents so an inheritance windfall or bonus from work – most second home buyers on the east Dorset coast work in property development or finance, according to Keith Fensom, head of Savills Canford Cliffs office – will be invested in a holiday home.
Where?
The stretch of coast between Bournemouth and Poole is enduringly popular with landlocked Londoners looking for a seaside retreat, which they can get to in two hours or less on a Friday evening after work, traffic permitting. Sandbanks, the small spit of land crossing the mouth of Poole Harbour is the most prestigious, spot but this entire coastline fits the bill.
What are they buying?
There are restrictions on letting out apartments in this area for less than six months, says Fensom, so there is little additional income to be made from a seaside home. It also means properties are likely to stand empty for extended periods so the more secure and the less maintenance required the better. For this reason many second home buyers opt for modern lock up and leave flats with maintained grounds and high security, rather than leaky but charming period houses. Two or three bedrooms are plenty for the weekend but that coveted sea view may command too large a price premium.
How much?
Budgets range from £250,000 to £2 million but the number of buyers has fallen from 32 per cent in 2016 to 24 per cent this year since the three per cent stamp duty surcharge was introduced for second home buyers last April, says Fensom. A UK holiday buy is still seen by many as a safer investment than one in Spain or Portugal though, especially with an unfavourable exchange rate. Nonetheless, “a second home is a discretionary purchase, you don’t need to buy one so people are put off by political uncertainty,” he says.
secondhomemoondance-0.jpg
£2,495,000: a three-bedroom flat at the top end of the typical Sandbanks buyer's holiday home budget with direct harbour access
INVESTORS
Who are they?
The three per cent stamp duty surcharge, increasing mortgage regulation and reduced tax relief have all helped dampen investors’ appetites, especially in increasingly pricey London but with low interest rates making savings look pitiful, there’s still some demand from investors looking for a decent long term return. And despite higher rates of stamp duty in Scotland than in England, Peter Lyell of Savills Edinburgh says the Scottish capital is still enticing London investors with the promise of long-term capital gains.
Where?
University towns are popular with investors for the obvious reason that they provide a ready turnover of students needing homes, and Edinburgh has six higher education institutions. It also has excellent links with London for the professional market so the city’s reputation as a safe investment is unsurprising. “Edinburgh’s been remarkably resilient through the financial crisis, the independence referendum, the election and it has recovered quicker than other Scottish cities. There’s a perception that capital values are more likely to rise here than elsewhere in Scotland,” says Lyell.
What are they buying?
Attractive, period stone-built houses in central locations close to university buildings and the city centre, which have already been converted into student lets are an easy buy for Edinburgh investors.
How much?
The buy-to-let market is dwindling, so investors tend to have amassed a lump sum, either through inheritance or by releasing equity from their main home and are buying with cash, says Lyell. This means budgets tend to be between £200,000 and £500,000, where the stamp duty burden is also less punitive.
investorlondon-street-0.jpg
£545,000: a classic stone-built Edinburgh student flat in New Town
DOWNSIZERS
Who are they?
Downsizers are regarded by everyone below them on the ladder as the ultimate winners of the property game. The over-65s own £1.5 trillion in combined housing wealth having seen the value of their family homes, often large and in popular areas, increase to unprecedented levels. They’re aware of their good fortune and many of them are only too eager to help their children onto the ladder. If that means exchanging the family house for a glamorous new home abounding with luxurious features, so be it.
Where?
The centre of town. Savills analysis shows that 59 per cent of downsizers moved to urban locations, lured by cinemas, theatres, shops, restaurants as well as easy access to hospitals and proximity to children and grandchildren. “In the past five or six years in Bristoland Bath we’ve been seeing very much an inward migration,” says George Cardale, head of Savills new homes. “Bristol city centre has really changed, it’s become a nice place to live.”
What are they buying?
Downsizers accounted for one in five Savills new home buyers over the past four years but, while they may be releasing some equity by moving, they don’t want to sacrifice on space for visiting family and a lifetime’s worth of treasured possessions. With large budgets at their disposal they are often trading up in terms of luxury, opting for developments that offer all the best facilities as well as impeccable design and specification.
How much?
Most people want to sell their home and buy a new one at around 50 per cent what they sold for,” says Cardale. “So if you sell for £1 million, which a nice family house in suburb of Bristol would cost, you can give your children some money for a deposit, pay off bills or supplement your pension and then spend the balance of £500,000 on a flat in the centre of Bristol.”
brandon-yard-bristol.jpg
£500,000: a Bristol new build property with view across to the ss Great Britain

https://www.homesandproperty.co.uk/property-news/buying/what-does-the-london-property-ladder-look-like-now-a114516.html

Wednesday, 18 October 2017

Government plans crackdown on 'overpriced' property service charges

Ministers considering changing law to protect leaseholders, as well as tenants facing large bills for repairs and services




 In England the total annual service charge on leasehold properties is estimated to be between £2.5bn and £3.5bn. Photograph: Murdo Macleod for the Guardian

Proposals to crack down on “overpriced” service charges and “unfair” costs paid by renters and leaseholders in England have been unveiled by the government.
Sajid Javid, the communities secretary, said ministers were considering changing the law to create a fairer property management system and make it easier to outlaw “rogue” letting and management agents.
The planned crackdown is the latest series of measures relating to tenants and leaseholders. In July the government proposed a complete ban on the sale of newly-built houses as leasehold in England, alongside restrictions on ground rents that could limit them to as low as zero. And in late 2016 ministers announced proposals to ban letting fees for tenants.
Now the government has service charges in its sights. These are the fees most leaseholders pay to cover their share of the cost of maintaining their building. According to official data, there are around 4.3m leasehold properties in England, and in 2014, total annual service charges were estimated at between £2.5bn and £3.5bn. Meanwhile, there are 4.5 million tenants in the rental sector, some of whom were being hit with “overcharged costs for repairs and services,” said the Department for Communities and Local Government.
Service charges are frequently the subject of controversy: in September, the Guardian reported on the case of a woman who has seen the annual service charge on her London flat increase from about £500 to more than £7,600. She claimed the £640 a month she had been asked to pay for her three-bedroom flat above a shop in Brixton was “extortionate”.
The DCLG said anecdotal evidence of poor management included a group of leaseholders charged 10 times the market rate to have a new fire escape fitted, with the £30,000 contract handed to the freeholder’s brother; one landlord charged £500 by his agent for repairing a shower door; and a London-based property agent who tried to charge a leaseholder almost £5,000 to transfer ownership of a parking space to other leaseholders.
The DCLG quoted research published by consumer organisation Which? in 2011. This claimed that leaseholders were “losing out to the tune of £700m a year because of excessive fees and hidden costs contained within their service charges”. It added that others such as the all-party parliamentary group on leasehold believed that the total could be as much as £1.4bn.
The department said it was seeking views on:
 whether a regulatory overhaul of the sector was needed;
 measures to “protect consumers from unfair costs and overpriced service charges”; and
 ways to place more power in the hands of consumers by giving leaseholders more say over their agent.
It will ask if a new independent regulatory body is needed. While the sector is partly self-regulated through professional bodies such as Arma (the Association of Residential Managing Agents) and Arla Propertymark, other property agents operate outside of any system and can provide a poor deal for consumers, said DCLG.
Measures to be considered as part of the call for evidence include looking at how transparency can be increased in the system, “so that tenants and leaseholders know what they are being charged for and why”.
The department said: “The government is determined to fix the problems in the property management industry, drive down costs and protect consumers from the small minority of rogue agents.”

Consultation launched on 'Fitness for Human Habitation' rental rules

The Welsh Government has launched a consultation on draft regulations and guidance to implement the Fitness for Human Habitation requirements for privately rented properties.
Under section 91 of the Renting Homes (Wales) Act 2016, landlords - and agents acting for them - must ensure that their properties are “fit for human habitation” both at the start and for the full duration of a tenancy (now called "contracts" in this Welsh legislation).
The consultation sets out the draft regulations and guidance that define what constitutes “fit for human habitation”. 
This will be split into 29 key issues which are:
Damp and mould growth; Asbestos and manufactured mineral fibres; Biocides; Carbon monoxide and fuel combustion products; Lead; Radiation; Uncombusted fuel gas; Volatile organic compounds;
Electrical hazards; Excess cold; Excess heat; Crowding and space; Entry by intruders; 
Lighting; Noise; Domestic hygiene, pests and refuse; Food safety; Personal hygiene, sanitation and drainage; Water supply for domestic purposes;
Falls associated with baths etc; Falls on the level; Falls associated with stairs and steps; Falls between levels; 
Fire; Hot surfaces and materials; Collision and entrapment; Explosions; Position and operability of amenities; Structural collapse and falling elements.
There will also be three specific requirements imposed on landlords, and if they are not met then the property will be deemed unfit for human habitation:
- Smoke alarms on every floor used as living accommodation;
- Carbon monoxide detectors in any room which has a gas, oil or solid fuel burning appliance installed;
- Electrical safety testing at least every five years.
Where a tenant believes their dwelling is not fit for human habitation, they may take court proceedings against the landlord for breach of contract. Such proceedings may result in an order for specific action to remedy the problem and/or an order for compensation.
A landlord who lets a dwelling which is not fit for human habitation, or who fails to rectify an issue causing the dwelling to be unfit, may also risk having their landlord licence revoked under Rent Smart Wales.
You can see the full consultation document here; agents have until January 18 2018 to respond.

Friday, 13 October 2017

'We are being ripped off by our freeholder - what are our rights?'

Leaseholders in apartment blocks have valuable protections - but they need to know how to exercise them
I own an apartment in a development in London with a 125-year lease. I, alongside the other residents in the building, feel we are being treated unfairly by the freeholder, which has also appointed itself manager of the property.

The freeholder company demands high service charges and is constantly trying to alter the building. It has built three rooftop extensions in three years. The company even attempted to build a cafĂ© in the courtyard – but this, thankfully, was rejected.

The company has also laid out plans to convert our garden storage, which holds our bikes, into a new apartment.

The quality of the services provided by the freeholder has been poor. It seems as though the freeholder is interested in raising as much money from the development as possible, rather than maintaining or improving the living conditions of its residents. 

We feel as though we don't have any rights against the freeholder. Do we?

RH, London

When you purchase an apartment in a building owned by a third party freeholder, the property is not wholly yours. You have basically bought the right to live in someone else's building for a long period time, in this case 125 years.

As the building owner, the freeholder generally has the rights one might associate with outright property ownership, such as being able to develop roof space or gardens, provided they have planning permission.

However, a freeholder cannot behave entirely unchecked and the law gives consideration to the rights of leaseholders in the building. This is especially true when it comes to service charges.

Nic Shulman, editor of News on the Block, which provides help and advice to flat owners and professionals working in the residential flat industry, said that leaseholders paying unreasonable service charges can challenge this in the First Tier Tribunal (Property Chamber), which is settles legal disputes. Successful applications provide a safeguard for leaseholders, as the unreasonable charges cannot be recovered.

In respect of lease extensions, aside from limited exceptions, the freeholder must grant the extension for a further 90 years plus any unexpired lease term. Should more than 50pc of the apartment owners want to buy the freehold then the law provides a mechanism to do so.

Mr Shulman said that a cheaper alternative, which may address this reader's concerns about the freeholder also being the property manager, would be to consider one of the legal regimes for changing the property manager.

The Right to Manage gives 50pc or more of the leaseholders' clubbing together the right to request they are in control of the management. This is a "no fault" procedure, so no wrongdoing needs to be proved. Otherwise, where fault can be established a petition can be made to the First Tier Tribunal to Appoint a Manager.

This process is usually engaged for the most serious cases of mismanagement. This is a complex area where expert legal advice is necessary.

Telegraph Money has previously reported on the problems faced by leasehold buyers, which include spiralling costs of buying the freehold from the freeholder, high ground rents and unreasonable service charges.
The Government’s plan to change leasehold rules for new-build homes could hit developers who will only be allowed to charge nominal peppercorn ground rents on all new leasehold properties such as flats.

In a white paper published earlier this year, the Government said: “Ground rents with short review periods and the potential to increase significantly throughout the lease period may not be offering a fair deal.

“We are absolutely determined to address this. We will therefore consult on a range of measures to tackle all unfair and unreasonable abuses of leasehold.”

http://www.telegraph.co.uk/property/uk/ripped-freeholder-rights/

Remortgage now to grab a cheap fixed-rate deal … before they’re gone

An expected interest rate rise means lenders are pulling their cheapest deals. We survey the best left on the market.

Get your fix … homeowners have been advised to find a new remortgage deal. Photograph: Eddie Keogh/Reuters

It’s crunch time for anyone thinking about switching to a new mortgage, after a string of lenders hiked the cost of their fixed-rate home loans.
During the past few days, lenders have been frantically pulling their lowest-priced deals or repricing them upwards as they prepare for an interest rate rise that could come as early as next month.
NatWest has whacked up the cost of its five-year fixes by up to 0.9% (equivalent to almost four quarter-point base rate rises), while HSBC and Barclays have pushed up rates by up to 0.2%. Meanwhile, Yorkshire building society had indicated its trailblazing two-year fix at just 0.99% and its table-topping five-year fix at 1.55% would be around for a while – but on Thursday it announced they were being pulled.
With time seemingly running out to lock into a bargain-basement deal, those thinking about remortgaging had better get a move on – and Sainsbury’s (see panel) is currently offering the best deals. The “buy now while stocks last” cliche really does apply here – although many people will argue that every warning in the past decade about an imminent rate rise has turned out to be false.
The good news is that at the time of writing there were still a fair few competitively priced home loans on the market, with two-year fixes available at little more than 1%, and five-year fixes starting at around 1.59%. But don’t bank on them being around for long.
Hints from the Bank of England that the first increase in the cost of borrowing for a decade could be weeks away have started to push up funding costs for lenders. On Monday, the financial data provider Moneyfacts revealed that 21 lenders had upped at least some of their rates since 12 September. That list will be a fair bit longer by now.
The rises have typically been in the order of 0.2%-0.25%, but the rate increases announced by NatWest range from 0.02%-0.9%, with five-year deals aimed at remortgagers seemingly taking the brunt of the changes. The rate on one NatWest five-year deal rose from 2.38% to 3.28%, another from 2.1% to 2.88%.
The governor of the Bank of England, Mark Carney, could raise rates on 2 November. Photograph: Afolabi Sotunde/Reuters
Meanwhile, Barclays has increased the cost of its new two-year fixes by up to 0.2%. That means its cheapest two-year fix now has a rate of 1.29% when just a few days ago it was 1.09%. HSBC upped its 1.14% two-year fix to 1.34% on Friday, while its 1.59% five-year fix has risen to 1.79%.
On Thursday night, Yorkshire withdrew two of the most eye-catching fixes on the market: a two-year deal priced at 0.99% and a five-year deal at a super-low 1.55%. It is likely to announce new deals next week, but you can bet they won’t be as good.
David Hollingworth at broker London & Country Mortgages says: “This is more than a few tweaks here and there – there’s a definite trend. As you get more [lenders] doing it, that only increases the pressure on those who remain.” His message to those who have been thinking about locking into a low fixed rate but have yet to act is: “I wouldn’t leave it much longer.”
Mark Harris of SPF Private Clients, said on Tuesday: “HSBC hopes to hold rates for another week at least, and Santander for another two …” but both had indicated that, should service levels begin to suffer “they may be forced to move sooner rather than later”. As it turns out, HSBC clearly decided it couldn’t hold out for another week.
We don’t have long to wait to find out whether the Bank of England will raise the base rate – the next monetary policy committee meeting is on 2 November.
Brian Murphy at broker firm Mortgage Advice Bureau says borrowers who have not taken action “still have time – just – to apply for and fix their mortgage before the interest rate decision is announced”. His view is that rates have been on the floor for a long time and are not going to get any lower. “There is still time to get the application in before 2 November,” he said.
The availability of record low fixed-rate deals has helped drive the numbers of people remortgaging to an eight-year high, as homeowners seek to protect themselves from a base rate rise. Conveyancing firm LMS this week said that in recent weeks “record numbers” of remortgagers had been opting for five-year fixes.
According to Charlotte Nelson at Moneyfacts, lenders are increasingly feeling the effects of higher swap rates. These are the rates banks pay to borrow from each other, which play a large part in determining the pricing of fixed-rate mortgages.
“Providers are now starting to factor swap rate rises into their pricing, causing the average two-year fixed rate to start creeping up, and this new trend is showing no signs of abating yet,” said Nelson. “With rates having sat at record lows, it is difficult for providers to swallow the increased cost by any means other than increasing the rates on offer.”
She added that it is vital borrowers act fast to ensure they get the best possible deal before rates increase.

Eye-catching offers

Two-year fixes
 1.09% from Sainsbury’s Bank. Maximum LTV 60%. Comes with a free valuation plus help with legal fees. £745 product fee.
 1.09% from Hanley Economic building society. Max LTV 60%. Comes with a free valuation plus free legal work when remortgaging using the society’s nominated solicitor. £475 product fee and £250 application fee.
 1.12% from Hanley Economic. Max LTV 75%. Comes with a free valuation and free legal work as above. £495 product fee and £250 application fee.
Five-year fixes
 1.59% from Sainsbury’s Bank. Max LTV 60%. Comes with a free valuation plus help with legal fees. £745 product fee.
 1.69% from Sainsbury’s Bank. Maximum LTV 75%. Comes with a free valuation, plus help with legal fees. £745 product fee.
 1.7% from Monmouthshire building society. Maximum LTV 65%. Provides help with legal fees. £999 product fee.

Thursday, 12 October 2017

Role reversal:stamp duty costs make it harder for first-time buyers to get on the property ladder - so what if sellers paid instead?

Paying £10,000 in stamp duty can put an average first-time buyer London home out of reach for many. The Government won't be scrapping stamp duty — but it could be done differently.

The capital’s housing market offers Londoners a raw deal. First-time buyers have to stump up an average £409,000, according to Halifax, Britain’s biggest mortgage lender.
That means that in addition to finding a minimum £40,000 deposit and at least £2,000 for legal and mortgage fees, they are also hit with a stamp duty bill for more than £10,000.
This additional hurdle stops many getting on the ladder. 
The Government introduced a graduated stamp duty system in the 2014 Autumn Statement.
Under this system you pay zero per cent on the first £125,000 of the price of your property, then two per cent on the proportion up to £250,000, five per cent on the proportion up to £925,000, 10 per cent on the next slug up to £1.5 million and 12 per cent on the rest. 
Before the new bands came in, you paid a tax rate on the whole purchase price.
According to the Treasury, the new system helps “98 per cent of those buying their first home, so that more people can achieve their dream of becoming homeowners”. 
WHY LONDON FIRST-TIME BUYERS ARE LOSING OUT
Unfortunately for Londoners, stamp duty is based on national house prices, not the market in the capital.
Latest government data shows that 64 per cent of residential housing purchases in England, Wales and Northern Ireland cost less than £250,000. But the high cost of a London starter home means would-be buyers find their first property transaction pushes them into the third tax bracket. 
This means that an average London flat, which costs £467,000 according to Rightmove, comes with a £13,800 stamp duty bill. The average terrace house, at £602,000, generates an eye-watering £20,100 tax bill.
Given these large sums, it’s no surprise that London and the South-East paid nearly half of the £11 billion stamp duty collected by the Treasury last financial year. 
HOW STAMP DUTY COULD BE MADE FAIRER
Of course, the Government won’t be scrapping stamp duty — but it could be done differently.
It could be paid by the seller. This isn’t as outrageous as it might seem. After all, it is the seller who is receiving money. Surely it is easier for them to pay the tax, instead of the person already scrabbling around to raise a deposit and mortgage?
Getting rid of stamp duty for first-time buyers would undoubtedly help more on to the ladder. 
As Phil Hall, head of public affairs and public policy at the Association of Accounting Technicians, points out:  “People moving up the ladder would be paying duty on the lower-priced house that they are selling, not the higher-priced one they are buying.”
Simon Gerrard, past president of the former National Association of Estate Agents — now known as NAEA Propertymark — highlights the benefits for the Exchequer, whose “coffers would be buoyed by revenue from the inevitable increase in transactional volume”.
One group would lose out — downsizers. However, Phil Hall adds: “In most cases downsizers will probably have no mortgage and will have significant equity. They’re likely best placed among all homeowner types to pay a little extra — certainly better placed than first-time buyers. 
“It could also be argued that once this has been in place for a few years, downsizers are likely to have benefited from these reforms to have got to wherever they are on the property ladder.”