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Government increases stamp duty threshold

Tuesday, 2 September 2008 12:00 AM

Following weeks of speculation, the government has today confirmed a package of measures designed to stimulate activity in the stalled UK housing market.

Key among the changes will be the suspension of stamp duty on all residential properties valued at less than £175,000 - as part of a £1 billion raft of measures, announced by communities secretary Hazel Blears.

The new threshold will remain in place for one year before being re-evaluated.

It is hoped the new regulation will support vulnerable homeowners at risk of repossession, and offer assistance to a house-building industry which has been hit by a sharp fall in profitability and growing job losses.

The measures revealed by Ms Blears include a new £300m shared equity scheme designed to offer 10,000 first-time buyers currently frozen out of the mortgage market the chance to get onto the property ladder.

In addition a £200m mortgage rescue scheme will also be offered to up to 6,000 of the most vulnerable homeowners facing repossession in order to ensure they remain in their home.

"This government is committed to practical action to help those most affected by the current state of the housing market," explained Ms Blears.

"We are working to make sure everyone struggling to pay the mortgage gets support and advice"

Speculation has been rife in recent weeks the government was to make an announcement, following the release of leaked documents to the Sun newspaper last month.

However, the government has been criticised for delaying such an announcement, as potential buyers delay purchases with potential savings on offer.

Ms Blears also confirmed some £400 million will be spent to boost the spending power of social housing providers, including registered social landlords and councils, in order to deliver 5,500 more social houses over the next 18 months by bringing funding forward.

This mirrors proposals made last week by the Liberal Democrats.

Housing minister Caroline Flint added: "We are determined to continue to do everything possible to promote long- term stability and fairness in the housing market.
"The measures announced today will go significantly further in supporting families who may be facing difficulties at the moment, while ensuring we maintain our focus on delivering more affordable homes over the long term."

The industry reacts here.

Chris O'Toole

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