I just got some stats about how many homes bought in the last year would have been covered by the stamp duty suspension were it to have come in 12 months ago. I’m surprised by the number frankly – no doubt I’ve spent too much time in London where a place for £175,000 is something of a pipedream. Sales last year that would have been caught were as follows:
– Between Jan and Dec 2007 – 320,129 sales
– Between May 2007 and Apr 2008 – 294,846 sales
There was a total of 998,000 sales in 2007, so the £175,000 threshold would have covered about one in three purchases.
I’m still waiting to hear how the banks will respond to this. At the moment they are only giving out money to people who they think stand a good chance of paying it all back at some point and who have decent deposits. I just can’t see how raising the 1% bar will help this – surely if you couldn’t get that 1% together (or could just afford it and need the help) the banks will still see you as a poor bet and hold onto their cash, won’t they?
On top of this there’s all sorts of questions about how the new shared equity scheme will work (whereby buyers will be offered an equity loan of up to thirty per cent of the value, co-funded by the government and the developer, free of charge for five years). Surely this must come on top of a deposit? If not, then you’re encouraging people to buy who have no money of their own – and we know where that got us.
The Treasury has been keen to separate today’s measures from the Crosby report into kick-starting the housing market (out in October), but I can’t see how this separation works. If the banks are lending very selectively because there’s not enough cash to go around, surely sorting that is the first step. I’d be very interested if someone could point out if I’m missing the point because, frankly, my head hurts.
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