Hopes dashed as Darling fails to extend the Stamp Duty holiday
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Chancellor Alistair Darling killed off industry hopes that the Stamp Duty holiday would be extended in his Pre-Budget speech last week.
Darling says the tax holiday was designed to address problems of affordability.
He says: “The government expects 240,000 housing transactions to benefit but the stimulus offered by the holiday relies on it being temporary so it will end on December 31 2009 as planned.”
A group of Labour backbench MPs recently tabled an Early Day Motion urging the government to retain the £175,000 threshold.
Mortgage Strategy also has a long-running campaign to reform the levy called Step Up Stamp Duty. This has been supported by thoussands of readers.
Peter Bolton King, chief executive of the National Association of Estate Agents, says: “With the government ignoring the advice of the industry there is a danger that the property slump which has affected thousands of families in the past 12 months will hit thousands more even harder in the year ahead.
“Stamp Duty is prohibitive to consumers looking to move up the housing ladder and unfairly penalises those who wish to invest in buy- to-let portfolios.”
But Darling did extend the Support for Mortgage Interest scheme for another six months.
Darling says: “Last year I improved the Support for Mortgage Interest scheme to provide better cover for those who have lost their jobs.
“More than 220,000 people have been helped so far and I have decided this support will be extended for a further six months.”
He also revealed that the government is exploring ways of encouraging a sustainable, transparent and standardised mortgage-backed securities market.
He says: “It is important that lenders have access to a diverse range of funding sources including securitisation markets. But these markets need to be robust, liquid and broadly consistent with financial and macroeconomic stability.”
The government says it is working with the Bank of England and the Financial Services Authority through the Council for Financial Stability to establish a broader investor base and lay the foundations for stronger markets.
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