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A London estate agent has put up a petition on the Downing Street Web site calling for the Government to suspend Stamp Duty in an effort to kick start the housing market.
At a time when money is being dolled out to the motor industry and to failed banks, you might think that Peter Young's initiative is simple self interest. But it's just possible that he has hit on the property market's very own version of 'quantitative easing'.
If house prices are not yet cheap enough then buyers too might want to support this initiative and knock up to 4% more off their purchase costs.
A selfish act?
At first glance this looks like a purely selfish act. Estate agents are going out of business at records rates as the number of homes selling year-on-year has fallen by nearly 70% in recent months. Like mortgage brokers, agents only get paid if a property sells.
Peter Young runs posh west London agents John D Wood but his call for the Government to suspend stamp duty until 2012 might do more than get people buying. A stable housing market should bring many more benefits as new homeowners go out and spend to decorate their new nest.
Solicitors, plumbers, decorators and removal men could all open up their businesses again. Every new home owner is reckoned to spend around £5,000 when they buy a new home and all this money would go into the High Street helping with the Bank of England's latest plan to 'ease' us out of recession by printing money.
Government lost £2.77Bn last year
The downturn in the housing market last year resulted in a loss to the Government of £2.77Bn on 2007. Raising the Stamp Duty threshold to £175,000 has so far cost less than £50m and on present volumes, suspending Stamp Duty across the board would only 'cost' the Exchequer around £2.4Bn a year.
At present, someone buying a home for £500,000 has to find £20,000 in Stamp Duty. Why not let them put that towards the increased deposit that they now need to find and help unlock the market and bring the benefits of a sturdy housing market to the wider economy?
Until the market stabilises it's unlikely that consumers will feel confident enough to get back out and spend in the High Street. Suspending Stamp Duty might give the market the kind of cardiac massage it so desperately needs and the petition ought to find support for house buyers as well as the agents trying to sell them.
See the petition here;- http://petitions.number10.gov.uk/SuspendStampDuty/
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