Darling announces stamp duty 'holiday'

Homes worth £175,000 or less are to be exempt from stamp duty for 12 months as part of a package to revive the housing market. The change, which comes into effect on Wednesday, raises the threshold on which 1 per cent stamp duty is paid from its current level of £125,000. The move will save eligible home-buyers up to £1,750 when they purchase a property, and relates only to buildings entirely for residential use. Chancellor Alistair Darling's announcement came as Prime Minister Gordon Brown prepared to unveil a raft of other measures to help struggling families through the credit crunch. Under the scheme, vulnerable families who are no longer able to keep up with their mortgage repayments will be offered the chance to sell their home and rent it back, or to enter into a shared equity or shared ownership scheme on the property. Recent figures show that the number of homes being repossessed hit their highest level for 12 years during the first half of the year, with 18,900 properties taken back by lenders, 48 per cent more than during the same period of 2007. The mortgage rescue scheme aims to help families avoid repossession, specifically targeting those who would be eligible for homelessness assistance. But it will not offer help to people who are deemed to have acted recklessly or irresponsibly and local authorities will play a major role in assessing applications for the scheme. The Government is also introducing a shared equity scheme for first-time buyers and it is boosting the money available for affordable housing schemes. The initiative is part of a wider series of announcements which will be made in due course to help alleviate the pressure on consumers and the industry. Ministers hope they will help shift some of the focus away from what has been a dreadful summer for Labour, with talk of a threatened coup against the Prime Minister and accusations of "dithering" over issues such as stamp duty and a windfall tax on the energy companies. Chancellor Alistair Darling has been accused of "talking the economy down" as the pound slumped against the euro and dollar in the wake of his claim that Britain is facing the worst economic crisis for 60 years. In a newspaper interview at the weekend, Mr Darling warned Britain's economic downturn would be "more profound and long-lasting" than expected and conditions are "arguably the worst they've been in 60 years". Although he later insisted he was referring to international conditions and not the domestic situation, such negative comments will spark speculation he will have to slash his growth forecasts in the upcoming Budget.

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ITN | September 2, 2008

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