Yesterday he told journalists that he had no intention of scrapping stamp duty in his first Budget, expected in October.
His comments came following criticism from a prominent agent that the new PM was in danger of spooking buyers.
Simon Gerrard, chairman of Martyn Gerrard Estate Agents, says: “If Burnham’s assumption of office is meant to usher in a new era, it’s begun with the same old mistakes made by the short-lived leaders of recent years. That is, with promises of big disruptive change casting a cloud of uncertainty across the market.
“We were supposed to enjoy a period of relative political stability after the tumult caused around the anticipated Budgets of last year. Now we’re back to sweeping reforms and new taxes being mooted through the press. This has a chilling effect not just on the housing market, but the wider economy as people hold fire and press pause on making decisions.
“Burnham would have been far wiser to signal continuity and safety. Our revolving door of leaders keeps shaking everything up in a bid to solve our problems when what the country desperately needs is a steady hand on the tiller to stay the course. Stability and certainty would provide the foundation for confidence, investment and economic growth. Mr Burnham continuing with promises of radical change to cure all our woes is likely to have the same effect as every other time before.”
Burnham now appears to have given a clear signal, telling journalists: “That won’t be happening. It’s just not the case that we are bringing forward plans, on that scale, at this moment in time.”
He was also critical of how such speculation had started.
However, Gerrard remains critical of other speculation which may be hindering the housing market.
For example, Land Value Tax – another concept that Burnham appears to support, although without giving details.
Gerrard comments: “Imposing an annual land value tax could lead to catastrophe if it is not implemented correctly. Above all, there needs to be an appreciation that the London market is different from the rest of the country.
“Saddling ordinary people with eye-watering tax bills just because they live in London is illogical. If care isn’t taken, this could see property values in the capital and South East crash, mortgage-holders trapped in negative equity and families unfairly hit with eye-watering bills.
“There are also huge questions around the logistics. It will take three to five years to implement because every property across the country will need to be valued. This will be a hugely expensive and laborious undertaking, which will outweigh any revenue generated for the first few years.
Finally the latest uncertainty is over Capital Gains Tax, which Lord Kinnock – cited by Burnham as effectively his mentor – says should be increased to the same percentages as income tax.
Gerrard says: “Other potential tax rises on capital gains tax or on wealth will backfire as previous attempts have all done. All it will do is deter investment and growth. If CGT becomes too high then it will undo much of the benefit of removing Stamp Duty. Those risking large bills will simply avoid selling and wait for the next government to lower the tax again.”
