A deposit scheme would open doors

19 April 2010

I have spent some time analysing chancellor Alistair Darling’s recent Budget and feel he missed a trick.

With the housing market acting as a lifeline for many businesses he could have generated revenue by launching a deposit loan scheme targeting first-time buyers, similar to the deal previously offered to key workers.

He could have launched an initiative whereby government money matches first-time buyers’ deposits up to, say, £25,000 so they can meet lenders’ deposit requirements and buy homes.

The loan could be repaid over 25 years at a nominal interest rate or be rolled up and repaid on the sale of the property, or even ported to a second property to keep the market moving.

By leaving Stamp Duty alone he could have enjoyed this as a bonus and raked in even more cash through the extra Income Tax and Corporation Tax on activity generated by businesses.

I am sure house builders across the country would have signed up to a deposit scheme such as this, given half a chance.

While the Stamp Duty holiday may turn heads my plan would have turned a corner for the housing market.

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