My initial feeling on the Chancellor’s Emergency Budget of 2010 was one of a lost opportunity. I think the news management by the Government over the last couple of weeks was very successful and my personal feeling was that the pain was not as much as I had anticipated. I was sure that Capital Gains Tax would increase, I thought that there might have been some developments with Stamp Duty and I thought that VAT may have gone to the 24% mark. However, in terms of the property market, I think that this has been a wasted opportunity. Where were the initiatives to help the first time buyers? Where was the initiative to increase investment into refurbishment of existing housing stock? Where was the assistance for the developers and builders to enable them to start building again?
I was filled with dismay at the levy imposed upon banks as whilst this certainly played to the popular press the banks will recoup this money leading to more expensive charges for mortgages, and other bank products.
Leading on from the banks, I was also disappointed to listen to the Chancellor’s mansion house speech the day before. As I have mentioned in previous blogs the way of controlling an overheating housing market is to be more innovative in your use of Capital Gains Tax. It is not to limit mortgages. Limiting mortgages will simply limit competition amongst lenders making borrowing more expensive, stifling the housing market and curtailing economic growth. In relation to the housing market the Budget of June 2010 was a wasted opportunity.