Chancellor shuns calls to raise Stamp Duty threshold

The industry has slammed chancellor Gordon Brown for ignoring calls to raise the lower Stamp Duty threshold from 60,000 to at least 150,000 in his pre-Budget statement last week.

Instead the chancellor praised his party’s work, telling parliament that mortgage rates since 1997 had averaged 6.1%, almost half the 11.4% average from 1979 to 1997 and that Britain had 1.2 million more homeowners since Labour came to power.

Brown also pledged that the government will take forward the Barker Review and pilot mixed communities in deprived estates and provide further support for first-time buyers.
He failed to mention the Miles review of longer fixed rate mortgages which many think is confirmation that the report is dead in the water.

Matthew Wyles, group development director at Portman, says: “It is mystifying that the Treasury has failed to follow through on Professor David Miles’ report. There were some ideas that were worthy of consideration.”

In particular, he says Miles’ ideas on reforming the current dual system whereby different rates are offered to existing and new clients, was worthy of merit and would lead to less churn.

Brown’s refusal to tackle Stamp Duty goes against industry opinion, with 543 already signed up to Mortgage Strategy’s campaign to Step Up Stamp Duty – by raising the threshold to 150,000 – in its first two weeks.

And the pre-Budget report did not rule out a potential housing market crash.

It states: “There is potential confusion in comparing the current ratio of house prices with earnings in order to ascertain the extent of disequilibrium regarding the sustainability of house prices.

“Indicators now unambiguously suggest activity is slowing down and it does not rule out a potential market crash.”