Stamp duty suspended on homes under £175,000
Tuesday, September 02, 2008
The government has announced that stamp duty is to be suspended for a year on homes costing less than £175,000.
Ministers confirmed the move on Tuesday as part of a series of measures designed to reinvigorate the housing market.
The package is also the first part of Gordon Brown's economic recovery plan to be unveiled this autumn as he seeks to revive his premiership.
The stamp duty decision will come into effect almost immediately on Wednesday after the chancellor was criticised over the summer for "dithering" over the proposal, which lenders and agents said had caused the market to stall further. It is expected to cost the Treasury around £600m in lost revenue.
As well as the housing help, the Treasury is thought to be finalising a range of responses aimed at assisting those in fuel poverty.
Other measures announced on Tuesday included interest-free loans of up to 30 per cent on new properties for families with incomes less than £60,000 per year.
The 'HomeBuy Direct' scheme will be co-funded by the government and large construction firms, with the Department for Communities and Local Government insisting that "hundreds of millions of pounds" had been put aside in the last Budget.
Ministers hope that 10,000 first-time buyers currently unable to secure a mortgage will benefit from the £300m shared equity scheme.
A third element to the plan will also see an effort to help people facing the risk of repossession.
Ministers want to work with mortgage lenders to make repossession only ever a last resort for those who fall into difficulty with their repayments, by extending relief for homeowners who lose their jobs or suffer a loss in income.
A £200m mortgage rescue scheme will be launched, on top of a £100m increase in Income Support for Mortgage Interest, which will be extended to come into effect after the 13 weeks rather than the current 39 weeks from April next year.
The government hopes that this reform will help prevent a further 10,000 repossessions.
There will also be a £400m boost in spending on social housing with a target of delivering 5,500 more council and housing association homes over the next 18 months by bringing funding forward.
Communities secretary Hazel Blears said: "This government is committed to practical action to help those most affected by the current state of the housing market.
"We are working to make sure everyone struggling to pay the mortgage gets support and advice.
"We are giving a leg-up to first-time buyers keen to own a place of their own.
"And by bringing forward our investment in social housing, we are both getting more decent, affordable housing ready for people to live in sooner, and helping the house building industry weather tough times."
