Light at the end of the tunnel maybe?

[Que Sera Sera]

Sorry if you have all seen this but I found it interesting!

 

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We need stamp duty reforms, not rumours

 

Government announcements are so vague they might even backfire

 

Anne Ashworth

 

 

The first anniversary of the entry of the term “credit crunch” into the language was marked by larger-than-expected losses from Northern Rock, an increase in repossessions and news that stamp duty might be suspended - a move supposed to make all the other bad stuff not seem quite so gloomy. But prospective first-time buyers who would be the beneficiaries of the abolition of stamp duty on homes between £125,000 and £250,000 may not view the concession in the way that the Government hopes.

For one thing, the repossession figures tell the unhappy story of those who rushed into homeownership encouraged by an dangerously attractive incentive - such as a Northern Rock 125 per cent Together loan.

Such mortgages are no longer available, but, then, even lower loan-to-value deals are scarce - a far greater disincentive to homeownership than stamp duty, especially since the proposals for a freeze are wonderfully vague. For example, the tax may be only be deferred and, whatever the form the concession takes, details will not emerge until autumn.

In the interim, would-be owner occupiers may be even more inclined to wait for prices to decline further rather than commit - as the Government hopes. There are now fears that some chains could collapse as the first-time buyer at the beginning of the interconnected series of transactions retreats rather than write a cheque for £2,499. This is the stamp duty payable on a £249,950 property.

 

 

 

But if first-time buyers decide to bide their time they should be aware of the risks of this strategy. If stamp duty is frozen, say, with effect from November 30, this could turn out to be a deadline by which investors will compete to snap up bargain-priced properties before the novices join the fray, possibly bidding up values. Many investors are said to be insanely anxious not “to miss the floor”, the point at which prices stop sliding; they could see the stamp duty holiday as that moment.

If the Government truly aspired to help first-time buyers, it would completely reform stamp duty. It is unfair that the rate jumps from 1 per cent to 3 per cent at £250,001 - forcing the buyer of a £250,950 home to pay a bill of £7,528 - £5,209 more than the tax on the £249,950 purchase. But what's the betting that the consequent loss of revenue will probably mean that ministers decide that first-time buyers are not such a priority, after all?

 

Please please please be so!!!!!!:yes:

[Guest Karen K]

Thanks for that, but i had a really good night last night and my head is all mushy so my have to read it again tomorrow LOL:)XX