The UK government is to axe stamp duty on house purchases below £175,000 for a year in an attempt to boost the housing market and its own flagging fortunes.
The new stamp duty rate kicks in from 3rd September 2008 and is in addition to a £1bn package to stimulate the severly depressed first time buyer end of the housing market. At present, purchases under £125,000 are stamp duty exempt. The new measure will cost £600m.
Other measures unveiled today include so-called "free loans
" for five years of up to 30% of the cost of a house. The relief will be available to first time buyers in England with an annual household income of less than £60,000.
Once the five-year period is up, buyers will be asked to pay an, as yet, unspecified fee. This scheme is expected to cost about £300m.
"This will help the housebuilding industry weather difficult conditions, so that, when the market recovers, they are ready to expand and get back on with building the new homes the country needs for the long term," the Department for Communities and Local Government said.
A further £400m has been earmarked for new social housing projects, while the government is also setting up an initiative where mortgage payers struggling to meet repayments can turn to a council or "social housing landlords" that will pay off the debt and charge tenants rent at an affordable level.
It will be interesting to see in the coming months if this helps the government's popularity, but it will be also interesting to see the impact it has on the letting market in the UK which has grown since the credit crunch. What impact if any will it have on the reduced ability for some aspirant homeowners to obtain a mortgage to buy their own home?
We will watch and report our thoughts.
Watch this space..... http://www.letsafe.net/
Reproduced in part from Yahoo news
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