Brown set to stamp on property prices
Copyright 2004 Derby Evening Telegraph
Derby Evening Telegraph
March 11, 2004
When the Nationwide confirmed a house price surge of 3.1 per cent in February - the highest monthly figure for nearly two years, since April 2002 - many homeowners across Britain would have been delighted. But within days, the message began to filter out from Whitehall that the madness could not continue and before the end of the week, the Financial Times confirmed: "It is time, the Treasury has decided, to put a brake on the runaway train." Although the Council of Mortgage Lenders has pleaded that homeowners shouldn't be bashed for even more cash - the Government's stamp duty haul alone soared from £830m in 1997/8 to £3,590m in 2003/3 - the fact is that Chancellor Gordon Brown can now inflict whatever taxes he fancies on the property market.
Suggestions from economists about what is needed to calm the housing market down include one from Oxford economist Gavin Cameron. He backs a tax on housing equivalent to the old domestic rates: about one per cent of property value per year.
With the value of residential property now reckoned at £3,000bn, that would mean an annual take of £30bn next year.
The snag with this approach is that people already pay old-style local rates - in the form of new-style council tax.
Perhaps all will be revealed in the Budget on March 17.
You can email me at Gavin.Cameron@economics.ox.ac.uk
Last updated: 15 March 2004.
