Labour announced in their pre-election budget that first time buyers buying property under £250,000 would be exempt from stamp duty for the next two years. The Conservative manifesto outlined the same policy, but would make the exemption indefinite.
Your Move wants the successful government to permanently raise the stamp-duty tax threshold to £250,000 for first-time buyers, with a commitment to review every year to raise it further to compensate for house price inflation and make this tax break available for buy to let investors as there is currently a reducing supply of properties to rent available.
Shared Equity Schemes:
The Liberal Democrats have promised to promote schemes for affordable housing, such as equity mortgages. Labour has announced they will continue their HomeBuy Scheme and will aim to work with Housing Associations to allow families on modest incomes to build equity stakes in their homes.
Your Move wants the successful government to provide further funding and expand upon shared equity schemes, such as HomeBuy, in conjunction with Local Housing Associations, to help first-time buyers and low-income households to enter the property market, despite the high house prices.
Labour has announced lending targets for the banks in which they have a stake, with consequences for executive remuneration if targets are not met. The Conservatives have committed to helping people on to the housing ladder, but have suggested reducing the banks’ reliance on wholesale lending.
Your Move wants the successful government to actively help close the funding gap in order to stimulate mortgage lenders to provide affordable, higher loan-to-value mortgages. The number of loans for house purchase in 2009 was half that of 2007. Continuing to unfreeze mortgage lending is a key factor for sustaining the recovery in the housing market.
Home Information Packs (HIPS):
The Conservatives have outlined plans to scrap HIPs, as have the Liberal Democrats. Under Labour, HIPs would be retained. In the growing likelihood of a hung parliament, HIPs are likely to be a bargaining chip between parties.
Your Move remains neutral on the subject of abolishing HIPs. It is still unclear how they have affected the process of home purchase. Since the introduction of HIPs, the pipeline conversion rate has improved from 33% each month to 42%. This could be as a result of HIPs, but equally, as a result of the increased volume of cash buyers. However, Your Move supports the continuation of Energy Performance Certificates.
David Newnes, the Managing Director of Your Move, comments: “Your Move believes that the recovery in the housing market will be modest in 2010. We think that house prices are likely to end the year at the level they have started, and then rise broadly in line with inflation until 2012. The recovery is still vulnerable, and a new government must be careful not to rock the boat.”
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