Property: Miras was ripe for the picking

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The Independent Online
If there was general rejoicing that mortgage interest relief (Miras) was not to be cut after all, it was a muted affair. If ever there was a plum for the Treasury to pick this was it, since everybody had prepared themselves for its demise.

The rising value of property and higher income levels have outstripped the usefulness of the tax relief of 15 per cent on the first pounds 30,000, which falls to 10 per cent in April. Could not the pounds 3bn saved be better spent on those in housing need?

The Council of Mortgage Lenders believes that housing expenditure has to be looked at as a whole. Miras is of most importance in areas with low property values, according to Sue Anderson for the Council.

So perhaps it is all a matter of timing. If interest rates head downwards, at 5 per cent, it would mean about pounds 12 to pounds 13 a month to the average household budget. What better opportunity could there be to sweep it away altogether.

A flurry of activity has followed the increase in stamp duty from 1.5 to 2 per cent on property above pounds 250,000 and from 2 to 3 per cent on homes over pounds 500,000. If buyers can rush things through by Tuesday, they could save themselves pounds 5,000.

Richard Donnell of FPD Savills does not expect it to have a marked effect at the top of the market. Some buyers may hesitate, but those on tight budgets are more likely to hold back on things like renovation work. Winkworth, the London agents, find that of their properties for sale, some 45 per cent are priced in excess of pounds 250,000. The national figure is about 2 per cent. They expect to see more properties joining the 11 they already have for sale at either pounds 249,000 or pounds 249,950.