Tuesday, September 2, 2008

It’s the only thing we do

Stamp duty is axed below £175,000

Stamp duty is to be axed for a year on properties costing less than £175,000 in an effort to kick start the ailing housing market.

Posted by holding out @ 09:19 AM (3464 views)
Please complete the required fields.



61 thoughts on “It’s the only thing we do

  • What a load of old rubbish i know ill rush out to buy a house to save £1700 or i can wait 6 months and save x times the amount

    Reply
    Please complete the required fields.



  • Brown in panic…

    Reply
    Please complete the required fields.



  • come’on darling!
    ahahaha. the labourists who want to act as labourists….
    on 175k, you can save 1.75k! ahahahaha.
    and the working class family can buy an holiday to benidorm with this discount!

    Reply
    Please complete the required fields.



  • Big debate on Radio 5 Live with Victoria D taking place right now – none of the callers so far falling for any of the proposed intervention measures – the one year Stamp Duty “relief” included.

    Reply
    Please complete the required fields.



  • waitingfor hpc says:

    this will not work – when house prices dropping at 2% per month nothing else is needed! That is £2,000 per month – you can not earn that kind of money easily. The CRASH is here!! MUUHAAAH

    Reply
    Please complete the required fields.



  • A 1% reduction in the cost of a property purchase, by removing lower rate stamp duty, will be wiped out in under 2 weeks if the current levels of price falls continue.
    Nationwide (August): -1.9%
    This is a cynical and useless gesture, destined to fail.
    A good comment on Newsnight yesterday:
    The opposite of the “Midas” touch is the “Brown” touch as everything he touches turns to……..? (Answers on a postcard to 10 Downing Street)

    Reply
    Please complete the required fields.



  • This is great news

    Stability Brown really has nmo idea – what I’m wondering is when will that graph level off – i.e. -15% yoy

    Reply
    Please complete the required fields.



  • This is the first reduction. There are two more in the pipeline, one towards the end of this year. There won’t be any warning next time.

    There are plans to quietly demolish large amounts of otherwise feasile housing by using health and safety officials who can be “trusted” to condemn properties on a large scale. The general idea is to do this on a “scattergun” basis so that no systematic pattern can be seen on anything other than very close inspection.

    This is happening at the moment, and in fact started approximately two months ago.

    Reply
    Please complete the required fields.



  • Missingteddybear says:

    Why save £1,750 in the next year when I can save £35,000 by waiting a further two years when prices have dropped a further 20% .
    It’s a no-brainer but the troubling thing is that there are many folk out there lacking in the brain department who might fall for this and be sucked into negative equity.

    Reply
    Please complete the required fields.



  • One effect this will certainly have is that those people currently looking to sell their properties at around the 180k- 195k mark will now have buyers putting in offers at 174,999 and refusing to go higher. Unlucky for some.

    Reply
    Please complete the required fields.



  • This will not work at all, firstly its just below £175000 which is a waste of time, secondly its just for a year and timed now, if your thinking of moving and want to save 1% wait a month instead.

    These trivial measures all show a government thats run out of money, real measures would have been all stamp duty suspended for 3 years plus other actions, complete waste of time and in 12 months time the re-introduction will act to drive things down further

    Reply
    Please complete the required fields.



  • japanese uncle says:

    In the very foreseeable future, stamp duty will not apply to 90% of the UK properties.

    Reply
    Please complete the required fields.



  • from the article – “”Households earning less than £60,000 will be offered loans free of charge for five years on new properties,
    co-funded by the state and developers.

    A spokeswoman said: “This is a sensible measure and it will help the housing market.”

    The loans system, called HomeBuy Direct, is to be run together with “large-scale” property firms. “”

    looks like they’ve found a new way of electronically printing money/debt. panic, deceit, – consequences?

    also looks like someone has decided a 30% fall is about right, though what sort of logic, if there is any, they’ve used is beyond me.

    how about FTB thinks “hmmn, if prices fall 30%, I’m not paying interest on that anyway and in 5 years time it will all be over and prices will be rising again, OK go for it” aaaagghhh!

    Reply
    Please complete the required fields.



  • More meddling in the prices of stuff on the market by The Cronies! And little else …

    Why a freeze for 1 year? What good will that do except assert a huge distortion in the market in 11.5 months time? If they can afford it for this year … can they not afford it for the next one? Or is it simply that all they are doing is being prepared to accept that extra budget deficit for this year only? Well, that’s rich … because at current volumes the cost of this move is practically 0 anyway (the cash cow that was stamp duty went dry around October/November last year anyway!).

    The government just ‘enforced’ a price drop on every hosue that was on the market between 175k and 180k with little other benefit to the market? Arguably this price fall was about to happen before the end of this year anyway (the end of this month even?) …

    What relevance such a saving for a home buyer?
    – a 1st time buyer can’t get a mortgage without a 25% mortgage so how is 1% ‘off’ the house price going to do anything more than make it only ‘4% less hard’ to enter a market that the vast majority of 1st time buyers are not interested in entering? 4% less deposit needed is hardly a helping hand from the government.

    And if the government decides to charge a fee at the end of 5 years time for their ‘cheap mortgage’ service is this charge declared at the start of the agreement? What if the buyer chooses to get their own mortgage within those 5 years? Has the government considered the risk of setting such a charge 5 years ahead of time when they have no idea what inflation is going to do in the next 5 years? Or have they missed the fact that ‘beat the boom & bust’ style of (re)election promise is blind faith in thei own (in)abilities/the impossible?

    Can anyone else see what positive effect this token gesture (meddling move?) could possibly ever have?

    AidanApWord

    Reply
    Please complete the required fields.



  • hpwatcher,

    I agree – “Brown in Panic”.

    Reply
    Please complete the required fields.



  • Well we know where house prices are going then – everything is going to £175k!

    A billion quid is a lot of money, but as compared to the entire value of the UK residential property base (approx £3,000 billion, est. 20 million houses, avg. £175k), it won’t make even a dent. A bit like Bush’s “stimulus” payments, the billion will wash through the system and be forgotten, only to show through as more inflation: £16.67 for each of the 60 million of us.

    This amounts to changing the colour of the fabric on the deckchairs on the Titanic.

    Labour governments always end with the public finances in ruins, inflation running wild and the currency in freefall. Seems this post-Blair Labour government is now just Old Labour with a nice tie.

    Reply
    Please complete the required fields.



  • (All together now)
    Oooooooh, the runaway train came down the track and she blew, she blew
    The runaway train came down the track and she blew, she blew
    The runaway train came down the track,
    It’s driver and crew crew papered over the cracks,
    But the housing market may never come back,
    And Gordy blew, blew, blew, blew, blew…

    Oh, the runaway train came down the track and she blew, she blew
    The runaway train came down the track and she blew, she blew
    The runaway train came down the track,
    Your negative equity is keeping track,
    With 50% off before prices comes back,
    And Gordy blew, blew, blew, blew, blew.

    Oh, the runaway train came down the track and she blew, she blew
    The runaway train came down the track and she blew, she blew
    The runaway train came down the track,
    A stamp duty holiday wont prevent a lack,
    Of 100% mortgages that may never come back,
    And Gordy blew, blew, blew, blew, blew.

    Reply
    Please complete the required fields.



  • If a government could turn the housing market around don’t you think they would have done in the past.

    The choice is easy housing market or the countries finances – you only have to look at the pound to see what choice they have taken.

    Anybody wanting to emigrate to Europe I will try and help

    Reply
    Please complete the required fields.



  • This is a farce. An economy that is built on inflated house prices (which, for some perverse reason, are viewed as a sign of strength) is a house of cards.

    Reply
    Please complete the required fields.



  • why above 175k do we have to pay tax? what is it a labourist governament!?

    Reply
    Please complete the required fields.



  • theboltonfury says:

    this just ensure those asking for circa 200k will very soon be forced in to the 174k region.

    A plan thoughout so well that even Baldrick would have dismissed it as half-ar5ed

    Reply
    Please complete the required fields.



  • mountain goat says:

    @malct point on “Other measures aimed at boosting the market include “free” loans of up to 30% for first time buyers in England. Households earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers.”

    Notice this is on “new properties” and only for FTB’s. This is to help developers, builders. Personally I want construction to continue through this recession, so bail out money going in that direction is not that objectionable. Pity the FTB who get suckered into it though.

    Reply
    Please complete the required fields.



  • Is that it or are some more announcments coming??

    Reply
    Please complete the required fields.



  • Yes, it often repeats itself. Take this extract from the BBC website:

    “The world’s financial markets were losing confidence in Sterling as the British economy stumbled. The Treasury could not balance the books. At the same time, Labour’s strategy emphasised high public spending which it appeared could no longer be paid for.

    By the autumn, the pound was indeed plunging and the government called in the International Monetary Fund, the body co-founded by the UK to tackle economic crises.”

    The date was 1976 and the newly unelected Labor Prime Minister (James “Jimmy Jimmy” Callaghan) was facing a UK economy in dire straits. Parallel this to 2008 and the newly unelected Labor Prime Minister (Gordon Brown) also faces the same issues.

    Reply
    Please complete the required fields.



  • Yes, it often repeats itself. Take this extract from the BBC website:

    “The world’s financial markets were losing confidence in Sterling as the British economy stumbled. The Treasury could not balance the books. At the same time, Labour’s strategy emphasised high public spending which it appeared could no longer be paid for.

    By the autumn, the pound was indeed plunging and the government called in the International Monetary Fund, the body co-founded by the UK to tackle economic crises.”

    The date was 1976 and the newly unelected Labor Prime Minister (James “Jimmy Jimmy” Callaghan) was facing a UK economy in dire straits. Parallel this to 2008 and the newly unelected Labor Prime Minister (Gordon Brown) also faces the same issues.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    The Tories tried this in 1991, it didn’t work then and it won’t work now.

    To rephrase that headline – SDLT exempt band extended from £150k to £175k. Big deal.

    Reply
    Please complete the required fields.



  • @MW – SDLT raised from £125-£175K (£50k increase) but as you say “big deal” in any event its for one year only.

    Reply
    Please complete the required fields.



  • @ matt the hat,
    Future Nu Lab announcements might cover:

    * Weak Furniture Retailing market – loans to anyone buying from DFS.

    * Weak Auto sales – No deposit for anyone buying a Fiesta ( funded by a new government loan department).

    There aren’t many houses for sale in Greater London under £175,000 -yet ! Perhaps Gordo is counting on a HPC!

    Reply
    Please complete the required fields.



  • O that’s just wonderful. Labour have just decided to fix this crisis by pumping even cheaper (free) capital down the throats of those (under 60K per annum) least likely to be able to pay it back! Isn’t that how we got into this mess in the first place? Genius.

    Reply
    Please complete the required fields.



  • george monsoon says:

    Let me get this straight..

    I take out one of these loans, and manage to get a mortgage for a house worth 170k
    Ok, I pay no stamp duty, but in 5 years this property is only worth 80k and I have to pay off the loan on top of the mortgage.
    What a wonderful way to trap people into a life of debt fueled slavery.

    Reply
    Please complete the required fields.



  • ahahaha.
    the labourists are acting as labourists….
    wow a discount of 1.75k on a house, wow! I guess the working class family can go holiday in benidorm now with that discount!
    com’on darling!

    Reply
    Please complete the required fields.



  • @17. george monsoon – only if you buy a new build (see my Citywire post) – the “int free loan” is not available if you were for example to buy a 1920’s mid terrace – some people are already commenting that the measures now put everyone not looking to sell a new build at a disadvantage !

    Reply
    Please complete the required fields.



  • “Personally I want construction to continue through this recession, so bail out money going in that direction is not that objectionable.”@mountain [email protected]

    …agreed, but I would like to see more regulations governing the size of these new builds. If they are to be used as the new “social” housing they should adhere to council house room sizes of the past, not “build em cheap and small”, ethos of the past 10 years

    Reply
    Please complete the required fields.



  • these measures clearly aren’t for buyers but purely for the developers who are hoping to be saved from bust. Surely people have seen thru this already

    Reply
    Please complete the required fields.



  • What mug is going to buy now to get 1% off, with houseprices falling at coming on for twice that each month? In a years time when the stamp duty holiday is over, prices are going to be a whole lot lower than 1% less than they are now.

    Reply
    Please complete the required fields.



  • g.m./[email protected]/18

    So you take out one of these loans and buy a newbuild for 170k (stamp duty exempt).

    Then in 5 years time it is worth 65k (it is only worth 130k in the current market anyway).

    You still owe 51k plus a fee on top of the original mortgage.

    You are now living on a council estate as the remainder of the development was bought for social housing 4 years ago!

    Great, where do I sign up!

    Reply
    Please complete the required fields.



  • What annoys me about this is that it supports the builders who have been building low quality, more or less unliveable housing. Moreover, if it had any chance of working, it would skew the value of new builds relative to the rest of the market. To see this, consider what would happen if you could get interest free loans for the total value of a house if and only if it is a new build. Suddenly new builds go up in price (as the cost of the money to buy them is less than for an equivalent non-new build), and their resale value is immediately much less than what was paid as no free loan would be available for the second purchaser. This thought experiment shows that it is nothing more than a cash injection straight into the builders at the expense of the taxpayer and any buyers who have to move after a few years. The idea is so economically ill-conceived that it highlights just how much trouble we are in with this bunch of desperate morons in charge of the country. Like everyone, I’ve been unhappy with governments and their policies before, but the last few years of this Labour administration makes me physically sick…I can’t think of any other way of describing the visceral loathing I have for what they are doing to this country. I’ve never been one for laissez faire capitalism, but anything would be better than this squandering of wealth. The transfer of wealth from the young, hard working and productive to the middle-aged, the lazy, the feckless and the corrupt during the past 10 years makes me seethe with rage.

    Reply
    Please complete the required fields.



  • why do people that earn more and can afford a bigger house have to be penalized? why people that live in london have to be penalized?
    why a socialist measure? and what this governament is doing for wealthy foreigners that are living the country? a country that has grown thanks to them?

    Reply
    Please complete the required fields.



  • Agreed D’oh @22 all except this is meant to be pathetic. The £ is being deliberately flushed down the toilet and these “measures” are specifically designed to crash the housing market (not that it needed much help).

    Reply
    Please complete the required fields.



  • handle_it @ 39 I wish I could agree with you that these b*ggers were clever enough to do something like that (regardless of whether or not it would be the right thing to do.). They aren’t…they are idiots. I’m working in a small company whose directors are similarly cashed up and stupid. The world is full of twits in power. Never ascribe to malice that which can be explained by stupidity has always been my motto, and the only thing that prevents me from becoming a conspiracy theorist…because you couldn’t plan the mess they have been making better if you tried.

    Reply
    Please complete the required fields.



  • handle_it said “The £ is being deliberately flushed down the toilet and these “measures” are specifically designed to crash the housing market”

    can you please explain what you mean, i.e. how will these measures speed up the crash??

    Reply
    Please complete the required fields.



  • Capitalistpiglet says:

    Oh no! I reckoned that my house was worth 185K, down from 200K. That means that no one will touch it now, or will not budge from offering more than 175K. It wouldn’t make sense otherwise. So thats another 10K off my house price then. Thanks Al.

    Reply
    Please complete the required fields.



  • Giving an insentive to buy new homes – increases supply – demand is still poor – fall in prices

    Reply
    Please complete the required fields.



  • Wow, enforcing an immediate reduction of 200k properties below £175k, that’s amazing. Perhaps Gordon knows what he is doing after all? Not!

    Reply
    Please complete the required fields.



  • There is one easy way to help FTBers.

    Introduce “no recourse” mortgages into the UK.

    Then, if an FTBer buys and is hit by neg equity, he can walk away and buy a cheaper one down the road without being chased for the losses.

    QED.

    Reply
    Please complete the required fields.



  • [email protected]: Because it’s assumed that if you earn that much or can buy a house for that much money, you can afford it.

    The top 1% of earners pay 19% of the total income tax take, but then the top 1% of earners have stratospheric salaries, so frankly they should shut up and pay over so that the 10% of earners earning below £115 a week (under £6000 per year) can be taken out of the tax system entirely. (Low earner figures from Annual Survey of Hours and Earnings, http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2007/tab1_1a.xls.)

    Just to give the annualized percentiles – percentage of earners earning less than this amount:

    10% – £5,980
    20% – £10,306
    25% – £11,960
    30% – £13,500
    40% – £16,359
    50% – £19,495
    60% – £22,927
    70% – £27,321
    75% – £29,895
    80% – £32,984
    90% – £42,370

    Bet most of you didn’t think you were in the top 25% (20% [10%]) of earners.

    The figures for part-time workers are even worse (bottom 10% earn below £50 per week) and the survey doesn’t include those who don’t work at all. Think about how much you spend every month on rent or mortgage repayments, compare to these incomes, then work out what these people have to live on.

    Reply
    Please complete the required fields.



  • wealthyvagrant says:

    Regarding @22 I agree the £ is going down the toilet, no question

    but I’m not sure if it’s deliberate…. it looks like extreme incompetence to me.

    Reply
    Please complete the required fields.



  • Another very easy way to help FTBers “LET THE MARKET CORRECT” without any interference…

    Reply
    Please complete the required fields.



  • As an alternative, perhaps builders could slash prices by a 1%. Oh I forgot, they have already done that and it had no impact.

    This announcement is little more than popularity politics by Brown.

    Reply
    Please complete the required fields.



  • 7. matt_the_hat @ 7

    Shouldn’t that be “Instability Brown” – just a thought

    Reply
    Please complete the required fields.



  • Or perhaps

    InCapability Brown – Everything he touches

    denzil @ 48 – “perhaps builders could slash prices by a 1%.” – I reckon that the possible saving of £1750 on stamp duty has been wiped off the average property value with today’s staggeringly inept announcements

    Reply
    Please complete the required fields.



  • I can assure you that this is only the beginning. ANYONE who buys now is going to have to watch it all crumble.

    Having said that, there are probably people who from one thing or another – some cause over which they have no control – have committed themselves.

    In all sincerity, I cannot stress how sad this makes me, and desperate for those people’s wellfare. I wish with all my heart that Gordon Brown had had some sense or compassion five years ago. How many lambs are to go to the slaughter? It is terrible and heartrending.

    Reply
    Please complete the required fields.



  • So anyone trying to sell a house for £180k now knows they won’t get a penny more than £174,999

    Will this make FTB’s rush out and buy? Of course not..

    Reply
    Please complete the required fields.



  • Why don’t the government and banks just admit that the best thing to kick start the housing market is let it crash 30% to 40% for the next 2 years and stop burdening people with massive debts they can ill afford.

    Do they really think a £1750 saving and 30% free loan in the current market is a good idea – it would be financial suicide.

    FTB’s wait 2 years and you will save 30% on your mortgage and 30% of your house will not owned by Gordon Brown and his mates

    Reply
    Please complete the required fields.



  • First: Help the Banks…….. Second: Help the Developers…….. Third: Screw the People!……..

    So now the price is being dictated. Up to 175K for new builds for FTBs. BEST TO WAIT then: A decent property wll be 1/3rd of this in no time at all and everyone will be quite content to pay the SD.
    More posturing methinks.

    Reply
    Please complete the required fields.



  • Come on…. I hear half the buyers will benefit. But how many already benefit with the £120K limit? Moving the limit from 120K to 175K is not going to net that many people, surely? Anyone got the stats for this?

    Reply
    Please complete the required fields.



  • Kruador,
    sorry but you british invented this. It is called capitalism. It is based on wealth producing wealth. If you try to help only the most poor this won’t help the comunity.
    I know someone can think it is cruel but it is just what you have done for years and years.
    Think only why your country is rich – at least richer than mine (Italy). We don’t have banks and companies bringing money to our country. Think for a moment if all the wealthy foreigners and companies left london. Think for a moment. Well this country will be dead.

    Reply
    Please complete the required fields.



  • plato, if you don’t help banks, you won’t help people. Who do you think are the biggest looser of all this? Banks! most of banks have lost between 40 and 70%, most of the people still keep their job!

    Reply
    Please complete the required fields.



  • “HALLELUJAH! THE HOUSING MARKET IS SAVED!”

    – a quick preview of tomorrow’s Express front page.

    Reply
    Please complete the required fields.



  • Letsgetreadytotumble says:

    Doesn’t this close down the market like the stamp duty dithering?
    I’m thinking the final details of this meddling will be announced in the mini budget, in October.
    So does the market close down until then?

    Reply
    Please complete the required fields.



  • Tenyearstogetmymoneyback says:

    george monsoon @ 30 said…

    “I take out one of these loans, and manage to get a mortgage for a house worth 170k
    Ok, I pay no stamp duty, but in 5 years this property is only worth 80k and I have to pay off the loan on top of the mortgage.
    What a wonderful way to trap people into a life of debt fueled slavery.”

    It depends if it is true Shared Equity

    By my calculations the Government will have a 30% stake in your £170K house of £51K
    In five years time when the property is worth £80K their 30% will be worth 24K so that should be all you have to pay back.

    I wonder if it really will work like that.

    :- Duncan

    Bought 1989 £65500 sold 1999 £70500. Could have done with some of this in 1995 (best offer £48000)
    p.s we’re talking about a 1980 three bed end of terrace in Hampshire here.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>