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Three wishes, one reality

It’s with bated breath that the mortgage market awaits chancellor Alistair Darling’s Budget on Wednesday. If Darling was a genie in a lamp our three wishes would be:

  • Raise the Stamp Duty threshold – thousands of Mortgage Strategy readers have long been emailing us calling for this and it’s consistently fallen on deaf ears.

  • Force lenders to offer high LTV mortgages to get the housing market moving – with would-be buyers either petrified about losing their jobs or unable to raise large enough deposits this is the only way to kick-start the housing market.

  • Delete the budget deficit – government borrowing is estimated by some to be £175bn so our great-great-great-grandchildren will still be paying off this gargantuan debt.

    Unfortunately, most of this wish list is likely to remain a fantasy but Darling could surprise us all and launch a ground-breaking reappraisal of Stamp Duty. Lord knows, the state coffers can’t be seeing much in the way of income from this tax at the moment. Now would be the perfect time to take a radical look at it and reform it so that when the market returns first-time buyers are attracted back.

    But as regards the deficit, Darling has little room for manoeuvre. And whoever gets to govern the country after the next general election won’t either.

    Even free market fundamentalists agree that government intervention has been vital to keeping the banking system on track but the consequence is that future governments will be forced to dip into our collective wallets to fund this largesse. No amount of wishing today will be able to get us away from that cold, hard reality.

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