UK Lenders Warn Government Not To Treat Homeowners As Their 'Cash Cow'

by Robert Lee, Tax-News.com, London

30 December 2003

A report published recently by the UK's Halifax bank has found that the savings enjoyed by homeowners from historically low interest rates have been negated by an increase in taxes and other charges associated with home ownership, such as council tax and stamp duty.

According to the Council of Mortgage Lenders, the number of home-buyers paying stamp duty in 2003 will be half a million higher than it would have been if the Government had uprated the threshold since 1997. "It must be tempting for any Government to see the housing market as a cash-cow,” remarked CML Director General Michael Coogan in the organisation’s pre-Budget statement. However, he added that the reality is that home-owners are disadvantaged in terms of subsidy and benefits compared to tenants.

Coupled with a sharp rise in council tax rates in recent months, the costs of running a home in Britain rose 7.2% last year, or three times the rate of inflation, the CML revealed.

"The Government needs to be mindful that there is a limit to the amount of tax home owners can bear before fiscal fatigue kicks in" Shane O’Riordain, the general manager of group economics at the Halifax observed, according to a Daily Telegraph report. "Rising council tax bills have diminished much of the benefit of lower monthly mortgage costs for many households," he added.

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