The submission claims that raising the threshold of stamp duty would bring home-ownership back into reach for many would-be first-time buyers. And raising the threshold for inheritance tax would restore some equilibrium for existing owners of relatively modest homes.
The submission also calls for more fundamental reform of stamp duty to remove the market distortions it creates. Many other commentators have acknowledged the validity of our arguments on this, but the Government still appears reluctant to implement reforms that could remove the market inefficiencies created by stamp duty.
Another proposal in the submission argues for the removal of tax on premiums for mortgage payment protection insurance. That would encourage more home-owners to protect themselves against the risk of being unable to pay their mortgage and show a continuing Government commitment to the initiative to make home-ownership more sustainable.
Given the current unprecedented scale of Government intervention in housing and mortgage markets, the submission argues for a closer partnership between Government and lenders to help ensure that initiatives are better co-ordinated. The UK mortgage and housing markets are widely acknowledged to be highly competitive and effective. Yet Government intervention already announced will affect housing supply, affordability, access to home-ownership, tenure choice and balance, rent levels, the structure of the mortgage industry, mortgage choice and pricing, and home-buying and selling. The rationale for intervention on this scale is unclear, but a closer partnership with lenders would help ensure that it does not produce damaging, unintended consequences.
Commenting on the pre-Budget submission, the CML's deputy director general Peter Williams said: "Home-owners are not universally wealthy - in fact, half of the poorest households are home-owners. And while two-thirds of households are home-owners, they get only 6% of the Government's housing spending. This obvious imbalance needs redressing.
"On property-related taxes, the Government appears to have no coherent policy. The threshold for stamp duty has not been raised since the Government was elected in 1997. Since then, the amount paid annually by home-owners has risen four-fold. Three-quarters of first-time buyers now have to pay stamp duty, a complete reversal from 1997 when three quarters of first-time buyers bought properties below the threshold. Without a change in approach, the tax burden on home-owners will continue to grow year after year."
