Council tax adding to first time buyer woes

25-Jun-2007

First time buyers already facing up to higher mortgage bills are also having to cope with the fact that the average council tax bill has increased by over three times the rate of RPI inflation over the past decade, according to new research.

Based on the average council tax for each billing authority area, the report from Halifax shows the problems facing those who have clawed their way onto the housing ladder extend beyond initial affordability costs.

Council tax now stands at an annual average of £1,078 for each household, according to the study – compared to a 1997-98 figure of £564.

"Council tax bills have increased significantly faster than either average earnings or retail prices over the past ten years," commented Halifax chief economist Martin Ellis.

On Friday Scottish MPs voted in favour of replacing council tax with a local income tax, paving the way for first minister Alex Salmond to push forward with its pre-election plan to abolish the tax.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

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