News
movewithus warns against Govt ‘quick fixes’
28 August 2008
According to the Royal Institute of Chartered Surveyors, the Government’s ambiguity about its plans for stamp duty has led to a 20% fall in prospective buyers in the last month. A report released last week claims that many buyers are “shelving their purchases in the hope that they can save tens of thousands of pounds” by waiting until the Chancellor’s autumn statement on the controversial tax. Robin king, movewithus founding director, is urging the Government to think carefully about any changes it makes.
Asked about abolishing stamp duty altogether, Robin King said: “Anything that relieves the burden of buying a property must be welcomed. Scrapping stamp duty would certainly be a popular measure and may inject some much needed confidence back into the market. However, the problems with purchasing are less to do with stamp duty and more about the lack of mortgage lending and the inability of first-time buyers to afford hefty deposits.”
Indeed, according to a recent survey carried out by movewithus, 62% of home movers stated an ‘abolition of stamp duty’ as the best way to attract first-time buyers back to the market.
Robin King continued: “Whatever they decide, the Government needs to avoid any ‘quick-fixes’ and remain focussed on measures that address the core problem – lack of liquidity in the mortgage market.”
King suggests a Government ‘homebuyer’s deposit scheme’ to help first–time buyers back to the market, funded either by existing stamp duty revenues or by a ‘housing deposit bond’, which pays incentives to investors.
“At the moment, if a Lender wants to lend up to 90% loan-to-value to first-time buyers, they would require a deposit of around £18,000. Through a ‘homebuyers deposit scheme’, the borrower could apply for funds from the Government. If they pass a Loan-to-earnings ratio, they are given a loan of up to 10% of the price of the property as an equity share in the property. This would attract first-time buyers back to the market and as the market picks up, become a healthy source of revenue for the Government.”
Source
http://www.movewithus.co.uk/mwu-news/00,news,54631,468,00.htm (launches a new window)
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