MPs from Opposition parties in the House of Commons have attacked the government’s recent stamp duty change - and taken the opportunity to have a swipe at landlords and second homes, too.
The mini-Budget six weeks ago raised the threshold before stamp duty is paid to £250,000 and for first-time buyers to £425,000.
However Labour MP John McDonnell told the Commons that the move was of little help to ordinary people, with wage levels, after 12 years of austerity, meaning that most of his Hayes & Harlington constituents could not save up for a deposit. He then complained about a boom in ‘private landlordism’, finding it extraordinary that incorporated landlords can still offset 100 per cent of their mortgage interest against profits.
McDonnell said we could assist first-time buyers to get on the housing ladder through housing supply and reducing overall property costs. If the government insist on proceeding with this Bill, we could protect the first-time buyer measures by paying for them through what he called “an excess profits tax” on the landlords and banks profiting from the government’s measures, he said.
In the same debate the former Liberal Democrat leader Tim Farron, said the new stamp duty cut would benefit only a fraction of one per cent of people who wanted to buy a house but are currently unable to do so. He repeated his call for a change in planning law so that second homes and holiday lets become separate categories of planning use.
Then Labour’s shadow treasury minister Tulip Siddiq contrasted the beneficiaries of the stamp duty change with the fact that average private rents have risen by over £4,500 a year compared with the position in 2010.
Siddiq went on to say: “This plan will do little to help people take their first important step on to the housing ladder and that it is just another Government handout for wealthy landlords and second homeowners. Labour is the true party of home ownership, which is why we have committed to a target of 70 per cent home ownership across the UK. We will achieve that by looking at reform of the planning system to increase house building. Because if the Government keep inflating demand without increasing supply, house prices will only rise.”
She reiterated Labour policy that it would give first refusal on newly built homes to local first time buyers. meaning an end to buy-to-let landlords and second homeowners getting in first.
Economic Secretary to the Treasury Richard Fuller closed the debate by addressing the prospect of a U-turn, saying that ‘the stamp duty change is already in effect and the Government are continuing with the legislation’. Separately, the Government’s stamp duty cut will ensure that about 43 per cent of purchases each year will pay no SDLT whatever and none of those will be purchases of second homes or buy to lets. He was keen to say that there is a two per cent charge for non-residents (foreign) on SDLT.
The minister closed by saying: “This measure will boost labour mobility, support hundreds of thousands of jobs and businesses, increase transactions to boost the property industry, and continue the Government’s record of supporting people, including younger people, into home ownership.”
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