NEWS of the most recent setback for the housing market reached me half way up a mountain in Iceland a couple of weeks ago.

I was taking a summer holiday break and received a call on my mobile from New Barnet resident, Shanaka Katuwawala. A suburb like Barnet is the kind of place where the state of the housing market is the focus of a huge amount of attention and, in these difficult times, anxiety. I am certain that many others will share the concerns that Shanaka rang to pass on to me.

He is trying to sell his house but his attempt to do so has run into a serious problem as result of a major error of judgement by the Government.

At the beginning of the month, the Treasury leaked the suggestion that they were seriously considering introducing a stamp duty holiday, suspending the operation of the tax for a period or allowing homebuyers to defer paying it.

At first glance, this looks like a welcome attempt to stimulate the market. Look a little closer, however, and we can see this is yet another Government blunder.

Actually introducing a stamp duty holiday could be helpful, but floating the suggestion that you might do so in the near future definitely isn’t. With buyers already in short supply, the market has frozen up even more as a result of the leak, as people decide they should postpone any plans to buy in order to wait for the expected stamp duty holiday.

Why buy now if your purchase might be significantly cheaper in a couple of months time? Hence people like Shanaka who are trying to sell their homes in a difficult market suddenly find buyers even scarcer than they were before.

While some of the problems in our housing market may be caused by the global economic situation, this is one that is entirely home-grown; as are Labour’s dismally unsuccessful Home Information Packs which have added several hundred pounds to the cost of selling a house and provided yet another barrier to families struggling to get on the housing ladder.

Over the past decade, Gordon Brown has made stamp duty an increasingly significant source of revenue. Under Labour, revenue from stamp duty has risen to over £13 billion, quadruple what it was ten years ago and has become a major barrier, especially for first time buyers, but also for others wanting to move house, perhaps because their family is expanding.

And the burden of this tax in Barnet is, of course, much greater than in many other parts of the country because of the area’s high property values.

In the current economic climate, with this month’s worrying surge in inflation coming on top of the hikes in the cost of fuel and food over recent months, the prospect of a big stamp duty bill is enough to shatter the home owning aspirations of many of my constituents.

That is why I want to see stamp duty scrapped for first time buyers on homes up to £250,000, to give many more people a real chance of owning their own homes.