x
By using this website, you agree to our use of cookies to enhance your experience.
award
award award
award award

TODAY'S OTHER NEWS

Stamp Duty cut would NOT help the market, claims tax specialist

A prominent tax specialist has suggested that stamp duty cuts would not help improve the housing market, despite many agents suggesting otherwise.

David Hannah, founder and principal consultant of Cornerstone Tax says: "Throughout other economic crises, stamp duty changes or relief have historically done very little to get the market moving again and there is no reason why it would help this time around either. 

“It has been and still is a poor tool for managing market behaviour. With low-deposit mortgages almost disappearing altogether, people are having to assess their options, but there are some ways that I believe the government could help first steppers.”

Hannah says that instead, government-backed purchase mortgage guarantees for borrowers would be “a great way” to install confidence in the mortgage market. 

He says that if the term of these guarantees were for five years, for example, the inflation of the housing market during the medium term would wipe off any negative equity on those properties. 

“This would give the market some security again, help buyers, and get the market moving again” says the specialist.

While other stimuli such as an extension of Help to Buy would almost certainly help the market, he insists that reinstating 95 per cent mortgages would be “almost essential” in allowing current renters to become tomorrow’s home owners. 

“Guaranteeing their borrowing for the mid-term will give lenders the confidence to bring these products back and restart the market” insists Hannah.

  • icon

    A government interventionist then - not really the way to go in my view. 'Help to Buy' is simply 'Help Fill the Directors Pockets'. Mortgage purchase guarantees would be another nutty Government waste of time and money. We have a free market - leave it that way. Stamp Duty has been shown to change market behaviour - look how the London market screeched to a halt when stamp duty rose to 12/15%.
    Get 5% deposits back for first time buyers, a sable market and we'll be ok.

  • icon

    Mr Hannah's rather parochial views here are wildly out of step with London, the engine of the country. London's property market was stagnated by the SDLT rises six years ago, punishing developers, downsizers and buy to let investors. The government should have left what was not broken alone.

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up