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Will the Government's inervention with exempting lower bracket stamp duties increase propensity to buy in the housing market or has Alistair Darling's weekend comments slashed our confidence in the UK Economy completely? In an attempt to initiate recovery within the worst economic climate the UK has endured for 60 years, the Government has stepped in by exempting properties worth less than £175,000 from stamp duty with immediate effect from 3rd September 08 for the following year only. Brown's aim of intervening in the housing market is to reignite the dormancy having resulted in recession; however mortgage advisors and estate agents agree this action may have made a slight impact months in advance but a universal opinion of "too little too late" is evidently widespread throughout the sector. The £6000 million measure focuses on consumers at the lower end of the market, likely to be first time buyers, and by taking them out of the stamp duty bracket altogether potentially saving them up to £1,750. The average cost of UK properties this month are at £164,000 and house buyers paying between £125,000 and £250,000 for their home are having to pay 1% of the price to the Government in tax.  The increased £175,000 thresholds taking effect as of tomorrow disregards buyers searching for properties worth more than £250,000 and are expected to continue paying at the higher bracket of 3% in stamp duty. Homes exceeding the value of £500,000 pay 4% of this tax. Following Alistair Darling's outrageous comments over the weekend in regards to, "no one had any idea" such a crunch was coming is ridiculous, whilst dangerously filling the nation with fear continuing "I think it's going to be more profound and long-lasting than people thought". Having blatantly slammed the UK economy and playing a vital role in the face of the Government trying to salvage these desperate times has left his reputation in tatters and strangely resulting in the imminent stamp duty action taken by Brown. We have all known this recession has been coming hence skyrocketing house prices within recent year's poses the inevitable cyclic movement present in economic trends throughout history. The proverbial what goes up must come down term springs to mind however the question needed answering is merely "By just how much?" And of all people, the chancellor should have a vague idea to report to his nation to secure faith in our leaders.  Hours before the Prime Ministers plans were unveiled the pound continued its descent against the euro in anticipation of the Chancellor's abysmal warnings about the economy. Sterling decreased against the euro to 81.28p this morning; the lowest level ever, since the single currency was introduced in 1999. The dollar is also catching up, with the pound falling to a two year low of $1.79. Yet another reason for business confidence to slump is the fact that the Bank of England is still likely to keep interest rates on hold at 5% on Thursday regardless of discussion over a reduction. Having exempted stamp duty for lower bracket buyers should encourage purchases within this band and knock on effects of increased propensity to buy are expected to boost our economy whilst allowing more disposable income within the UK. Will stamp duty exemption affect our spending power and encourage first time buyers to purchase homes or has Darling's careless comments diminished any ounce of hope we may or may not have had in the dictators of our value? Only time will tell so watch this space and for the mean time hang in there for the light at the end of this long meandering tunnel. Share this Article:                        Advertisement |
