View more on these topics

A rigged game of give and take

It’s pretty worrying if tinkering with Stamp Duty is the best Labour can come up with as the centrepiece of its pre-election Budget, says Sally Laker, managing director of Mortgage Intelligence Holdings


Some ideas have been put forward. For example, if state-backed banks were forced to provide products that take lodger income into account the average first-time buyer could access an additional £11,000 according to This could make a big difference.

The website points out that flatmate mortgages would offer a lifeline to first-time buyers without leaving the government out of pocket. It’s possible that this could kill two birds with one stone.

It would provide a leg-up on the housing ladder while boosting the supply of affordable housing for young people by increasing the stock of flatshares.

Not only would the extra cash help them buy their first properties faster, they’d be sharing bills and thus living more cheaply in the meantime.

According to Easyroommate, someone earning the average salary of £26,000 can borrow between £47,600 and £65,40. But if lenders included the £4,392 annual income the average home owner could earn from renting out a room this would rise considerably.

By allowing 2.5 x this income to be borrowed flatmate mortgages would allow the average borrower access to an extra £11,000.

The government can’t win
Meanwhile, Tory leader David Cameron has slammed the government’s economic plans, saying all Labour has achieved is debt, waste and taxes.

And speaking after Darling’s Budget presentation Cameron told MPs Labour had previously rubbished his party’s plan to cut Stamp Duty. He pointed out that the centrepiece of the Budget had been pre-torpedoed by a Treasury minister, quoting the economic secretary as saying that raising the Stamp Duty threshold would not be an effective use of public money.

“First they denounce it, then they embrace it,” Cameron boomed.

And even more predictably Liberal Democrat leader Nick Clegg lambasted both big parties for making lots of noise and showing “no honesty”.

He criticised Darling for only slightly modifying his overoptimistic growth forecasts and described tax changes as a gross disappointment.

So the government can’t win. Until the housing market is back on its feet everyone will be critical, and rightly so.

Although the recession is not necessarily the government’s fault it has dragged its feet with regard to getting the housing market back on track.

The Stamp Duty initiative should be welcomed but at the same time kept in context. This small measure became the centrepiece of the Budget. It’s pretty worrying if this is the best the government can come up with, and perhaps a sign of the serious financial constraints within which it is forced to operate.



Jury is out on whether Post Office deal will be open to adverse clients

The Post Office says it is too early to say whether its proposed first-time buyer 90% LTV product will cater for adverse borrowers. As part of Labour’s election campaign, business secretary Peter Mandelson has announced an expansion of the financial services offered by the Post Office, which will include a new range of mortgages. He […]


Tailor your advice to suit debt group

A growing debt net has been created by recession and job losses, and more consumers are being dragged into it than before. The net has widened to include greater numbers of higher earners and shows that those struggling with debt come from varied walks of life. We have looked at debt patterns across the UK, […]

Three catalysts for European equities

By Rob Burnett, Manager of the Neptune European Opportunities Fund In recent weeks, the bear case for European equities has become more pronounced on the back of weaker-than-expected GDP data and deflation concerns. This softening in economic momentum has led some investors to question whether the ECB is behind the curve and indeed whether it […]


News and expert analysis straight to your inbox

Sign up