Peter O’Donovan
mortgage manager at IFA Bestinvest”Sticking to mortgage and lending related issues I would like to see a reduction in the auxiliary fees charged in the mortgage process. I would like to see a change to Stamp Duty Land Tax. While people have been calling on the Government to abolish it, I doubt this will happen so increase the threshold to £250,000 and then charge on a staggered basis. The first £250,000 at 1% and next £250,000 at 3% would reduce the cost in the middle bracket where next-time buyers tend to buy their second or third properties. I would also like to see a further reduction in other mortgage related costs so no VAT on estate agents’ fees, and VAT solicitors’ fees for purchases only. This will allow buyers to put more into the deposit.” alan lakey
partner at Highclere Financial Services”The bad news is that personal and indirect taxes are going up. The good news is that it will not be in this April’s Budget. The name of the game is damage limitation with an eye on the General Election.
“Encouragement will be given to employers looking to expand and the usual talk of job creation schemes will echo. Given the current anti-financial services backlash there will be determined mutterings about limiting bonuses and we might see some form of windfall tax applied to director pay-offs.
“National Insurance contributions, the favourite stealth tax, will likely be left alone as this is considered a tax on employment, but revenue will have to be raised somehow so Capital Gains Tax may jump to 20%.
“As usual the devil is in the detail and while the Chancellor may spout encouraging words the Budget papers will, as usual, contain a selection of nasties.” melanie bien
director of Savills Private Finance”With a huge shortfall in Government finances there is unlikely to be much in the way of giveaways in the Budget. However, there are several ways in which the Government could help boost the weak housing market without spending a great deal.
“The removal of Stamp Duty on all transactions is an obvious step. By removing Stamp Duty only from lower-priced transactions, the Government has done little to help kick-start the housing market. With so few transactions at the moment, removing Stamp Duty from all purchases would not cost the Government much but should have a significant impact.
“More real assistance for first-time buyers is essential. The majority of lenders still insist on big deposits, which is making first-time buyers an endangered species. The reintroduction of mortgage indemnity guarantees, sponsored by the Government, would help make it easier for first-time buyers to get funding.”david hollingworth
head of communications at L&C”It is hard to know what we should expect from this year’s Budget. While the spotlight will be on Mr Darling to bring some cheer to the nation amidst the gloom, I fear it is more likely that flesh will be put on the bones of initiatives such as the Mortgage Support Scheme that have already been announced in recent months. Further funding for shared equity schemes would do no harm at all – these could play a vital role in providing a way back for first time buyers struggling to build up an adequate deposit.
“One area that should receive attention will be Stamp Duty Land Tax. The Stamp Duty window for property up to £175,000 until September may be extended although there is an argument that this nullifies the incentive of a deadline. I would therefore hope to see the property value bands increased at the same time if a time extension is on the cards.”Fahim Antoniades
director of Quantum Money”My wish-list could fill the pages of this publication but to keep it relevant to our industry, the first thing I would like to see is an extension of the Business Payments Support Service for professional intermediaries. Our industry has been hit the hardest of all and many face the problem of having to pay taxes on previous years’ record takings at precisely the time when their coffers have been hit hardest. Secondly, a tiered Stamp Duty system, where Duty is paid on a pro-rata basis over and above the current thresholds, could help stimulate house purchasing.
“A purchase of £350,000 would therefore cost 1% between £175,000 to £250,000 and 3% on the remaining £100,000; reducing Duty from £10,500 to £3,750. Finally, a budget for bringing disused property – the so called ‘hidden homes’ – back in to usage would probably save more money than embarking on an affordable homes building programme.” fionnuala earley
chief economist at Nationwide”While affordability has improved substantially as a result of lower interest rates and falling house prices, the transaction costs of moving house are still high. Stamp Duty reforms are needed to help to stimulate recovery in the market but a review of the system is also well overdue.
“Raising the initial threshold of Stamp Duty to £250,000 and applying a flat rate of 1% above this with no further bands, would help by giving the greatest initial assistance to those at the bottom end of the ladder with least access to funds to pay the tax and preventing the distortion in pricing around the higher level thresholds. A more fundamental review should consider aligning Stamp Duty thresholds with house price inflation.”
