It was good to hear Mrs Blears wriggling when asked if she would recommend a young friend to buy a flat or house today, now there is to be no Stamp Duty on a property between £125,000 and £175,000 for a year.
It is the crucial question. If you can now recomment first time buyers should buy, the measure might help the market a little. If advisers and analysts still think there could another 5-10% fall in residential property prices, it would be better advice to the young person to wait a few months, as saving 1% to lose several times that is not good business.
I wonder where the government gets the £600 million of lost revenue figure from. Presumably it is left over from the out of date and inaccurate forecasts given at the time of the last Budget.That may be what is pencilled in at the moment for Stamp Duty on such properties, but it is highly unlikely they will collect that much anyway, given the very low level of mortage availability and the freezing of the residential property market generally.
One cheer for the government’s housing package – tax cuts are welcome. It was a pity they refused to tell us how the package will be paid for, or to change the government’s economic forecasts. As the OECD is now forecasting a recession in the UK – two down quarters this year – we need a counter forecast from the Treasury.