Russel + Aitken dismisses effect of VAT hike on mortgage applicants

Date:Wednesday 17th November 2010
Author: Max Freedman

The upcoming increase in VAT is not likely to have a significant impact on the number of mortgage applicants choosing to buy a new house over the next few months, according to an expert from Russel + Aitken.

Dianne Paterson, property partner at the law firm, explained that the levy will only affect a small number of the fees associated with the purchase of a home.

In her view, the increase in price is not significant enough within the total cost of a property to have any real impact on the housing market.

Ms Paterson also rejected the idea that stamp duty alterations will generally change attitudes in the sector.

She said: "It is unlikely that the increase in stamp duty will have much impact on the average market ... being that it affects only properties over £1 million."

A recent study by Lloyds TSB Scotland showed there was a year-on-year 4.6 per cent increase in house prices in the country.