The stamp duty threshold will be raised from £125,000 to £175,000 on residential property for 12 months starting from tomorrow. This means the majority of first-time buyers will be exempt and brings to an end the uncertainty around stamp duty which has paralysed the housing market in recent weeks. First-time buyers who are able to negotiate a discount to take into account next year’s likely price falls could find that now is a good time to buy

First-time buyers with a household income of less than £60,000 will also benefit from an interest-free equity loan for five years of up to 30 per cent of the home’s value. This will be funded by the Government and a housing developer. This should provide the buyer with a significant deposit, gaining them access to some of the most competitive mortgage rates.

Measures to assist low-income families who are in danger of having their homes repossessed were also announced. The £300m mortgage rescue scheme offers families three choices: -

• A sale and rent-back scheme where a registered social landlord such as a housing association buys the property but rents it back to the previous owner at a level they can afford
• A shared ownership scheme where the landlord buys a share, thereby enabling the owner to pay back some of their mortgage
• Or a shared equity scheme where the landlord provides an equity loan enabling the owner to reduce their mortgage payments.

It is the first time shared ownership and equity schemes have been offered to those in danger of having their homes repossessed.

(September 2008)