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The political pack

This week’s general election provides an opportunity to look at some of the property-related policies of the main parties.

In the Budget, Labour pinched the Tories’ policy on lower stamp duty land tax for first-time buyers although the Tories indicated the change would be permanent whereas Labour has introduced it for only two years. However, none of the parties has committed to make stamp duty fairer by moving it to the slab system, whereby each rate is only charged on that portion of the purchase price between the specified bands.

If stamp duty were made fairer in this way there would be less need to introduce a special offer temporarily discriminating against everyone who is not an FTB and even some FTBs.

Labour’s Budget rise in stamp duty to 5 per cent on properties above £1m from April next year will give a deadline for people to beat.

Neither the Tories nor Liberal Democrats have said they will change this and so presumably both will continue with this 5 per cent rate. The incentive to buy should provide a mini boom in the sale of properties over £1m and push up prices, with most of the impact in the six months before next April.

The Conservatives would abolish the mandatory requirement for sellers to provide a home information pack, although the energy performance certificate will continue to be mandatory. As the EPC is an European Union requirement, the Tories could not abolish this. I suspect they would take Hip action quickly. Any delay risks slowing down activity in the property market as sellers defer marketing their property to avoid wasting money on the Hip.

Hip providers should continue to have the opportunity to market their product but they will have to persuade sellers they are offering added value.

None of the parties has said anything about encouraging the re-emergence of the residential mortgage-backed securities and covered bond markets, which will be necessary before realistically the banks (plus Nationwide) will be able to repay the £300bn owed to the Bank of England and due to be repaid by 2014 (with £180bn due by January 2011).

The Conservatives will abolish the FSA and return its macro regulatory functions to the Bank of England, with a new consumer protection agency being responsible for consumer protection.

Ray Bougler is senior technical manager at John Charcol


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