Economy 9 July 2020 Why the stamp duty cut won’t benefit many homebuyers in the north The median house price is below £125,000 in 24 northern local authorities. Ian Forsyth/Getty Images The Angel of the North in Gateshead. Sign UpGet the New Statesman's Morning Call email. Sign-up More than half of buyers in large parts of the north won’t benefit at all from the government’s stamp duty holiday. That’s according to a new analysis of house price data, showing that those paying the tax – even at the lower end of the scale – are mainly concentrated in London and the south-east of England. Chancellor Rishi Sunak yesterday announced a temporary increase in the stamp duty threshold, meaning that people won’t pay tax on the first £500,000 of all property sales in England and Northern Ireland. At present, people pay 2 per cent tax on any property value over £125,000, then 5 per cent above £250,000, 10 per cent above £925,000 and 12 per cent on above £1.5m. First-time buyers pay 5 per cent tax on any value between £300,000 and £500,000. Analysis of Land Registry data shows first-time buyers represented just 21 per cent of the housing market as of March this year. In 250 out of 316 local authority districts in England, the average price paid by a first-time buyer in March 2020 was below the £300,000 threshold. Which regions will save the most? First-time buyers will mainly benefit where the average first-time house price is highest – particularly in London and the south-east. The move is more likely to help people who already own property – as they previously had to pay the standard rate on any house worth over £125,000. While that might seem a fairly low figure, it very much depends where you live. For example, nearly three-quarters (73 per cent) of property sales so far this year in Burnley were already exempt from stamp duty, as the price paid was below £125,000. That isn’t uncommon in the north of England. In Rochdale 52 per cent of sales are below £125,000, in Redcar and Cleveland 55 per cent, in Stoke 63 per cent and in Blackpool 66 per cent. Across England as a whole, 25 local authorities have median sale prices below £125,000. Twelve of those are in the north-west and 12 more in the north-east and Yorkshire and the Humber. All this means a far smaller proportion of house buyers in parts of the north, which tend to have higher deprivation levels and lower incomes, will see any benefit (although, of course, they won’t lose anything, either). The UK has a vast house price gap between the south – and London in particular – and the north. There is, for example, only one borough in the whole of the capital – Tower Hamlets – where more than 5 per cent of properties currently sell for less than £125,000. House buyers in London are, of course, more likely to pay above £500,000 for a property – and stamp duty will continue to kick in at that level. Some 43 per cent of London property sales in 2020 have exceeded £500,000. But the exemption will apply to the first £500,000, so savings will still be substantial – up to a maximum of £15,000. The stamp duty cut may help kickstart the economy – but whether homeowners see any personal benefit, and how much they will see, depends very much on where they live. › Why Rishi Sunak’s stimulus package is unlikely to prove a cure for the UK’s economic woes Michael Goodier is a data journalist at New Statesman media group Subscribe To stay on top of global affairs and enjoy even more international coverage subscribe for just £1 per month!