Stamp Duty announcement - worth the wait?

The government has announced that the stamp duty threshold has been increased from £125,000 to £175,000 for a period of one year. The move - which applies to residential property - would save someone buying a £174,000 property £1,740.

After weeks of waiting while the housing market has ground to a virtual standstill, it would appear that the announcement wasn't actually worth waiting for as it falls well short of what the market had hoped for. However on the plus side now that the announcement has been made it may mean the market starts moving again.

Other measures aimed at boosting the market include "free" loans of up to 30% for first time buyers in England.

Households earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers.

The stamp duty move was welcomed by Britain's biggest mortgage lender, Halifax.

A spokeswoman said: "This is a sensible measure and it will help the housing market."

House prices are reportedly falling at their fastest rate since the early 1990s, while rising fuel costs and the global credit crunch are denting economic confidence.

Communities Secretary Hazel Blears will announce a raft of proposals on Tuesday aimed at buoying the property market. She is one of several cabinet ministers putting forward plans seen as the beginning of Mr Brown's "recovery plan".

The loans system, called HomeBuy Direct, is to be run together with "large-scale" property firms.

Once the five-year "free" period is up, homebuyers will be asked to pay a fee, the Department for Communities and Local Government said - although no more detail of this was provided.

A spokesman added that "hundreds of millions of pounds" had been put aside in the last Budget for such a move.

In a statement, the DCLG said: "Not only will this [HomeBuy Direct] help first-time buyers, but it will also support the industry by identifying buyers for their new homes.

"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."

'More homes sooner'

For existing homeowners who can no longer afford mortgage payments, the government says councils or social housing landlords can pay off the debt and instead charge tenants rent "at a level they can afford".

The DCLG is also promising to "bring forward funding for social housing from existing budgets, delivering more social homes sooner".

However, an opposing view was heard on the radio this morning a very well spoken young lady, who would be a first time buyer, asking why the taxes she pays should support borrowers when they've proved themselves to be a bad risk already, and that she cannot afford to join the property owning majority. Well said, that lady !