Last updated 10:39, Friday, 22 August 2008

A TYNE Valley estate agent has poured cold water on the recently leaked idea that the Government could suspend Stamp Duty on house purchases up to £250,000 to kick-start the stalled housing market.

And Lucinda Reed, of independent chartered surveyors, George F. White, is also dubious about press reports that the UK housing industry would back such a scheme.

“I think that if this stamp duty suspension does come into play, potential purchasers will not rush to proceed but simply wait and see what is going to happen,” she said.

“A stamp duty holiday is just delaying the inevitable for any first-time buyer. What would be of benefit to the housing market would be for the Chancellor to remove the lower level of stamp duty permanently.

“House prices have increased considerably over the last few years and now the majority of house purchases are liable for this tax.”

Since it was revealed that the Government may suspend the bottom level of stamp duty for first-time buyers as an emergency measure, the Treasury has sought to play down the report.

The official line is that this is just one of a number of ideas being considered. But Chancellor Alistair Darling has refused to rule out changes to the property tax ahead of this autumn's pre-Budget report, so he has left his options open.

Ms Reed, head of property sales for George F. White, which has offices in Hexham, warns that if the Chancellor does opt for the stamp duty holiday, the strategy is unlikely to work.

“It would give a false impression of the housing market being on the rise again,” she said.

“We shouldn’t forget that this would only be a short-term boost and at some point we would have to return to the reality of the current situation and address it properly.”

Her view is akin to that of Opposition leader David Cameron. He said last week that the stamp duty leak – suspected to have come from Downing Street itself – had made the crisis in the housing market even worse.

“Their decision to brief out the possibility of a stamp duty holiday was completely reckless. Far from freeing up the housing market they've actually frozen it," said Mr Cameron.