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CML urges parties to go further on stamp duty and funding

The Council of Mortgage Lenders has called for the major political parties to do more to address issues around wholesale mortgage funding and stamp duty.

In its fortnightly newsletter, News & Views, the CML raises concerns that although each of the three major parties have significant housing, home-ownership and mortgage lending proposals in their manifestos, it is disappointing that none of them have addressed the shortage of mortgage funding.

Conservative leader David Cameron says his party would ensure lower levels of leverage and “less dependence on unstable wholesale funding”, if it wins the election on May 6. The CML says it understands Tory concerns that the closure of the wholesale markets contributed to the credit crunch, but warns that the £300bn funding gap has to be filled.

The newsletter says: “The glaring omission from all the party manifestos is how to address the key question of a £300 billion funding gap created by the closure of wholesale funding markets. This will be one of the biggest challenges for the new government.”

The CML has also urged the parties to go further with their proposals to reform stamp duty.

In this year’s Budget, the Government increased the stamp-duty threshold for first-time buyers to £250,000 for the next two years while the Conservatives would make this increase permanent.

However, the CML says this will have a modest effect on the initial cost of becoming a homeowner, with raising a large enough deposit being the biggest hurdle. It also calls for the parties to take stamp duty reform further by implementing a gradient style tax system.

It says: “no party is advocating the more comprehensive reform of stamp duty that we favour, which would remove the iniquity of paying duty at the highest marginal rate on the whole of the price paid for a property.”


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