Stamp duty relief will bring little help to the South East

There is a clear North-South divide with respect to the twelve-month suspension of stamp duty

Rumours of a change to the stamp-duty regime enraged agents when they were leaked last month. Such relief from the dread tax was exactly the sort of market assistance that they hoped would come from the Government - but the promise of tax savings at some future time caused some of the few active buyers to abort deals. The announcement of a suspension of stamp duty on all homes priced under £175,000 may not be as generous as hoped - but has quickly removed the damaging uncertainty.

Research from Halifax, the lender, indicates that 230,000 homebuyers in England and Wales would have been spared stamp duty if the temporary higher threshold had been in place last year. Sadly, fewer buyers will be likely to benefit over the course of the 12-month holiday because of the sharp decline in property sales, particulary in the lower prices ranges, which has suffered from the lack of first-time buyers. The average first-timer, Halifax reports, pays an average £144,283 for a home on which he or she would be saved an average £1,443 in stamp duty.

The change will bring temporarily the exemption from stamp duty in line with the current average house price - which the latest Land Registry figures show to be £178,364 - but many buyers in London, the South East, South West and East of England will not feel the benefit. The average cost of a home in these areas far exceeds the Government's £175,000 cut-off: in Greater London the average home costs £348,366.