Battle of the Chancellor's ear
Autumn Property Survey
Sunday 01 October 1995
The debate over what should or could be done about it has raged all year. Wets who want to ease the plight of everyone suffering the effects of market forces have made common cause with Thatcherites who see the Government's primary loyalty to a property-owning democracy and argue that the Chancellor should do something to revive the market and float borrowers off the rocks of negative equity.
Suggested measures urged on Kenenth Clarke include the restoration of tax relief at 25 per cent on eligible mortgage interest, an increase in eligible loans from pounds 30,000 to pounds 40,000 or more, either for first-time buyers or for everyone; the suspension or abolition of stamp duty on all property sales, or at least an increase in the threshold of pounds 60,000.
Hardline advocates of market forces, however, have made common cause with those who believe that rising property values create a reservoir of inflation that threatens the economy, and have urged the Chancellor not to interfere or risk creating a fresh surge in inflation.
Both sides see the autumn as a turning-point. Both sides have right on their side. Both agree the depressed property market is the main reason why home- owners refuse to spend or borrow, why there is no feel-good factor, and the Government is heading for electoral defeat. But some pundits insist that the property market is at the trough and is poised to turn. If they are right this is just the wrong time to stimulate the market with tax concessions and risk triggering yet another inflationary surge.
Three times in the past 25 years, surging property prices have led within 18 months to a surge in the underlying level of inflation because prosperous home-owners, encouraged by surging property values, have gone out and borrowed money on the security of their homes.
The word in Westminster is that the hawks have won the argument and the Chancellor will do nothing to try to tackle the problem, but the campaign will go on at least until the Budget on 28 November.
- 1 I was a Woman Against Feminism too
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
- 4 Students offered grants if they tweet pro-Israeli propaganda
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned
Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
Students offered grants if they tweet pro-Israeli propaganda
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...