Government 'should leave stamp duty alone'

Posted: 22 Aug 2008 13:13:51 GMT

The government should avoid meddling with stamp duty and let the housing market sort itself out over time, it has been claimed.

According to Paul Holmes, chief executive of Firstrung - a firm providing services to first time buyers - removing stamp duty would not fix the housing market in one fell swoop.

He said: "I think you have to look at the stamp duty on the average price of a home; it's on average, £5000. Five thousand pounds discount in effect is not going to heal all the problems in the housing market in one stroke.

"Market forces are now correcting the market and it should be allowed to correct without any governmental interference."

Mr Holmes went on to claim that government "tinkering" with thresholds would quickly be negated by estate agents pushing up their sales prices to reflect any changes to stamp duty, removing any benefit for buyers.

Stamp duty is currently graded into three bands. For properties priced between £125,000 and £250,000 it is calculated at one per cent of the overall value.

This rises to three per cent for real estate in the £250,000 to £500,000 price range and four per cent for those above £400,000.

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