Wednesday, 3 September 2008

UK’Stamp Duty’ suspended for 12 months

Has anyone noticed?

New Labour’s much trumpeted partial holiday on ‘Stamp duty’ (for non UK residents this is a sales tax imposed by the state on house sales) is, if it is of benefit to anyone, mostly likely to be of benefit in the north, which at least historically was demographically more New Labour friendly.

New Labour are talking about a holiday for stamp duty under £175K This should cover quite a few properties for sale in the North and proportionately far less in the South, due to regional differences in house prices. Any figures the Government states one suspects will be 'spun' averages.

Could it be that they calculate they have terminally burned their bridges already with the South, so they want to minimise the coming electoral debacle for at least some of their sitting MPs

House sales depend on chains, with new time buyers going in at the bottom of the market and the others in the chain trading up, How far up the chain will theis make a difference?

Of course if you can't get a mortgage in the first place – and that is the major actual problem with the housing market, mortgages having effectively dried up because of the credit crunch. Then what difference will reducing the sales tax of around £1.7K imposed on a few of the sales make?

And let’s not forget that any improvement in the housing market that may actually be had from this piece of spin will have to be paid for in reverse, at the end of the ‘holiday’ in a year’s time, when ther will be a corresponding rush then a step back down in sales.