Leader: A carrot but no panacea
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The raising of the Stamp Duty threshold to £250,000 last week was the Labour Party’s final attempt to stop an embarrassing defeat at the next election.
Will it be enough? By bringing its policies in line with the Tories’ sweeteners - the £250,000 threshold had already been dangled by David Cameron and co - could we now be faced with a hung parliament, with little separating the two main parties?
With the Stamp Duty threshold increased, in theory the result should be that first-time buyers start snapping up homes in record time.
But there has been no government scheme to encourage home owners to trade up - quite the opposite in fact, with Stamp Duty immediately hitting 3% if your property is over £250,000.
In fact one of the key problems about the current market is the lack of available property. In some areas properties are frequently exceeding their asking price and demand for the right type of property is so high that sales are going to closed bids. For would-be home buyers the whole process is a nightmare.
In short, chancellor Alistair Darling’s little piece of electioneering last week will no doubt encourage more first-time buyers to look into buying a mortgage as a result of effectively axing Stamp Duty.
But it’s the first in a series of barriers and getting rid of Stamp Duty has done nothing to remedy the problem of a lack of affordable property on the market or the relative scarcity of high LTV deals.
It was a terrific carrot to dangle in front of the electorate but it’s unlikely to alleviate major deficiencies that continue to blight the market.
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