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Shouldn’t George Osborne have learned a lesson from the past?
Original Author: Rosalind Renshaw
Twenty years ago, the last big property boom was just getting under way after a crash that began overnight in August 1988.
That was when the then Chancellor Nigel Lawson ended double mortgage tax relief (MIRAS) having helpfully announced that he would do this back in March of that year.
Some six months of an over-heated market ended in a sudden collapse.
But, by 1996, things were finally looking better – although the recovery still had pain in it for some people.
An excellent piece in the Guardian this weekend, by Donna Ferguson, looks at the housing market’s winners and losers of 20 years ago.
The losers included people like Dagmar Noble, whose home was repossessed and sold for £55,000 – £12,000 less than she had paid for it in 1989.
Ever since then she has been renting, and acknowledges that she doesn’t like paying someone else’s mortgage.
Compared with her are the people who bought in 1996, and have proved they did so at exactly the right time – making huge amounts of money, albeit some of it paper money, by buying when the market was near bottom.
A well-written and thought-provoking piece
But could it – or something very like it – happen again?
Today we don’t have MIRAS. However, we do have a Chancellor who has – just as Lawson did – announced a significant change in tax several months before implementing it.
The result? Buying agent Garrington has 38% more buy-to-let clients than this time a year ago, while Stacks Property Search says there is a mini-bubble as investors rush to buy property, hiking prices and generally – for the moment – making things worse for first-time buyers.
Post-April 1, it could all be a very different story.
http://www.propertyindustryeye.com/shouldnt-george-osborne-have-learned-a-lesson-from-the-past/
