Rising property prices mean that nearly a fifth of homebuyers have to pay stamp duty at a higher-than-standard rate, a report has said

Halifax said the number of home sales in England and Wales above £250,000 has risen almost fourfold in the past five years.

And because of this increase the percentage of homebuyers paying 3% stamp duty had risen from 6% in 2001 to 19% in 2006.

Stamp duty at 3% kicks in when a property is bought for between £250,000 and £500,000.

A new analysis by Halifax links stamp duty to postcode districts across England and Wales. The figures show London and the South East account for nearly two-thirds of the homes attracting stamp duty at 3%.

Tim Crawford, group economist, at Halifax, said: "Stamp duty revenue raised from home sales continues to rise rapidly. Bracket creep has been a key factor as a growing percentage of property sales now occur above the higher stamp duty thresholds of £250,000 and £500,000, which have not been changed since their introduction in 1997.” 

“Nearly a quarter of postcode districts in England and Wales now have an average price above the 3% stamp duty threshold of £250,000, compared to only one in 20 districts five years ago.”

Halifax said if the higher stamp duty thresholds had been increased in line with house price inflation since July 1997 (when the £250,000 and £500,000 stamp duty thresholds were introduced), the £250,000 threshold would now stand at £680,000 and the £500,000 would be £1,360,000.

If the lowest stamp duty threshold, 1% had been increased in line with house price inflation since March 1993, it would now stand at £185,000, compared to its current level of £125,000.

The Halifax called on the chancellor to increase the level of stamp duty in line with the rise in house prices in the Budget on 21 March.

But a spokesman for the Treasury said: "As a result of threshold increases made by the Chancellor, five out of six homebuyers pay stamp duty at 1% or pay none at all.”