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‘Stamp duty should be replaced with property taxes’ – Star Letter 15/05/2020

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  • 15/05/2020
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‘Stamp duty should be replaced with property taxes’ – Star Letter 15/05/2020
Each week, Mortgage Solutions and its sister title Specialist Lending Solutions run a Star Letter feature, in which we collate the top comments posted under our articles.

 

The first comment was under the article: Three options for stamp duty cuts to stimulate market – Oblix 

A user named ‘Mr Angry’ said: “Maybe now is the time to seize the opportunity to abolish Stamp Duty Land Tax altogether and implement annual property taxes in its stead.  

It’s a much more sensible system that brings in government revenue on a fairer basis and without creating a native injecting to mobility. It’s so obvious it’s amazing it’s not already in place. 

 

More consideration needed for mortgage holidays 

Another article which inspired a discussion was: FCA considers 12-month mortgage payment holiday – reports 

Andy Wilson said: “I would prefer to see this called a ‘payment break’ and not a ‘payment holiday’. Call it a holiday and it suggests a pleasurable experience. Far too many borrowers will treat it like one, taking the option when, in fact, they could still afford to pay their mortgage, and use the savings to spend it on something nice. 

We didn’t see any proposals for a 12-month payment break when the UK faced severe austerity measures some years ago when many were made redundant. Any suggestion of this now must be accompanied by clear messages of the possible effects of taking such a break.”

Also, the Financial Conduct Authority (FCA) might like to consider a drive to support the arrangement of more accident, sickness and unemployment policies going forward; clearly the coronavirus and its economic impacts were unforeseen but will be devastating for some,” Wilson added. 

 

Different payment holiday options

In response to the same article, John Azopardi said: “I am in favour of clients being shielded from the effects of falling incomes. I would like to see the FCA recommend that all lenders offer a suite of options to borrowers.  

Miss payments for three months, miss payments for six months, miss payments for 12 months, and interest only for up to 12 months. 

He added: But mortgage holders should be encouraged to seek advice before proceeding.  

Missed payments could tip someone into a higher loan to value bracket, particularly if lenders’ indexed values are starting to fall. Missing payments will accentuate the effect of a deteriorating loan to value. 

 

Focusing on money management 

Replying to the article: Mortgage holiday extension could hinder lending capacity – industry reactsDerek said: Mortgage holidays are certainly required by many clients, but I am concerned that these are being simply offered on request.  

Whilst all the clients I have spoken to realise that this is a pause in payment and the money has to be made up, many clients are seeing as an opportunity to have more money now whether they need it or not and are seeing this as a preferred alternative to economising. 

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