The increase in the nil rate band of Stamp Duty Land Tax (stamp duty) to £120,000 in Budget 2005 is no comfort to first-time buyers because of the way the tax is imposed.
If you buy a property over the threshold, you will face a tax bill based on the full value of the property and not the amount by which it exceeds the nil rate band.
The average property value being searched on Moneyextra.com by first-time buyers in February was £169,182. With stamp duty imposed at 1 per cent on properties between £120,001 and £250,000, that creates a tax bill of £1,691.82.
It is rumored that, having raised stamp duty rates four times in his first four budgets, the Chancellor may return to the tax and increase top rates again.
Robin Amlot, of Moneyextra.com, said, Gordon Brown could put thousands pf pounds back into the pockets of hard-pressed first-time buyers at the same time but the chances are he wont
According to moneyextra.com, the average mortgage being sought was £127,846, up 3.39 per cent on year-ago levels and the completed mortgage value was almost £141,000.
The most popular mortgage lender in February this year, for the first two months of 2006, and indeed for 2005 was Nationwide Building Society.
However, mutual lenders no longer dominate the tables, Nationwide is one of only two mutuals to take the top ten in February, the other being Stroud and Swindon Building Society.
Find out how much stamp duty you will pay here
