Home-made Budget

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The Independent Online
Everyone who is in the process of buying or selling property can relax. Tax relief on mortgages has been reduced by only 5 per cent, from 15 to 10 per cent, when most had written off Miras altogether. The increase in stamp duty from 1 to 1.5 per cent on purchases above pounds 250,000 and double to 2 per cent on property above pounds 500,000, doesn't even register on the Richter scale of their worst imaginings. So what effect, if any, do estate agents believe the Budget will have on the housing market? We asked a few for their opinions.

Ian Stewart, director and head of Savills Residential Agency: "It is quite reasonable for stamp duty to be set at 2 per cent for properties over pounds 500,000. Those affected can afford the extra 1 per cent. For example, it means that whoever buys Tony Blair's house will be paying pounds 12,000 instead of pounds 6,000. But the implications are that higher interest rates will control the economy and, in due course, that will have a dampening effect on prices."

John Husband, senior partner of Humberts: "The increase in stamp duty will undoubtedly have an impact in the short term on the market for higher- priced properties. But it is debatable that rises of this level will have any effect in the medium to long term, particularly if external factors continue to fuel rises which have over the past year averaged 10 per cent. Miras has almost ceased to exist as a factor in buyers' budgets and its reduction will cost the individual no more than pounds 10 per month, although clearly it will be more if interest rates rise."

David Woodcock, managing director, Black Horse Agencies: "Some first- time buyers next April will be disappointed by the loss in tax relief, but it is too small to worry about. However, a betting man would give you very short odds on interest rates not going up half a per cent or more in the next six months, and that will have a greater impact on the market."

Simon Agace, chairman of Winkworth: "Since there was no intimation of stamp duty rising again, I don't see the market being affected by the Budget. The reduction in tax relief on mortgages will not have much effect in London. Uncertainty about interest rates and an unstable and upward currency are unsettling, though."

Alan Brown, managing director of Cala Homes, Midlands: "This is a progressive Budget that overall is good for business, and will not have a great effect on the house-building industry."

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