Governments boost to housing to help landlords?

Luckily I was away in Italy last week whilst the Government revealed it's latest pathetic approach to stimulating the housing market.

Apparently they are going to get the housing market moving by giving tax breaks aimed at first time buyers. In their typical half baked approach the government will give house buyers a 'holiday' from paying the 1% stamp duty for properties under £175,000, but only for 1 year mind!

The Financial Times over the weekend probably correctly predicts that this measure will benefit the numbers of landlords and property investors who are looking at picking up a bargain in the current climate. This is because the threshold is at a level that many landlords look to pay up to when purchasing an investment in order to obtain the necessary rental yields to make the investment to "stack up".

Expert advice on buy-to-let mortgages - leading brokers - 1 FORM

The stamp duty holiday which was part of raft of measures could save a buyer up to £1750 on the cost of buying an investment property to let out. The flip side for landlords looking at selling at a price just above the threshold could now be forced to cut their price in order to appeal to buyers in the depressed market.

Advice to the Chancellor

Here some advice for the Chancellor. Good governments anticipate problems before they happen. Everybody new we had a housing bubble, any body who read Andrew Farlow's excellent research for Credit Suisse First Boston back in January 2004 would have seen what was coming. Could it be that old Prudence himself - Gordon Brown who was rather keen to reap the tax benefits of the house price boom through increasing taxes on Stamp Duty and Inheritance Tax turned a blind eye to the inevitable. May be he had no choice, in order to spend as he has been he needed the money.

A smart government would have bought measures in to restrict lending by banks in the way that existed under previous governments. This way landlords would not have been exposed to the boom and bust of the current housing market. I'm sure all of us would have preferred a steady growth in the value of our assets rather than be forced to deal with the huge peaks and troughs that we are now exposed to.

My advice to this government is that concentrate on getting the big decisions right - that way you want have to embarrass yourselves and us the electorate with piffling gesture politics that does nothing to stop the horse after it has bolted!