"Cities may set Stamp Duty and keep revenue"

reports a Times newspaper headline today, quoting Danny Alexander the chief secretary to the Treasury.

There are some compelling arguments marshalled in favour of such a change but what would it mean for real estate investment in those cities?

On the face of it, a city with a lower SDLT rate ought to be more attractive to real estate investors and it would certainly lower the purchase costs; but would there be an increase in the volatility of stamp duty rates?

Uncertainty has always been a problem for investors in long-term relatively illiquid assets. Property valuations are affected by changes in stamp duty even when properties are not sold, a stamp duty increase can reduce values overnight so increased volatility could be a problem.

And, what of the boundaries? We do not yet know where any lines might be drawn but is it possible that the metropolitan areas of Liverpool and Manchester might benefit when Blackburn and Preston don't?

What is sure is that any differential in rates would affect investment decisions and almost inevitably create winners and losers.

Implementation of any such changes remain a long way off, but consideration must be given to not skewing the field against towns and cities that need and deserve investment.