The Government has announced a range of measures to help first time buyers and homeowners who are struggling with repayments.
From now, anyone buying a property priced at £175,000 or less will not have to pay stamp duty. In a year’s time, the level will revert to its old figure of £125,000. A series of rescue packages have also been announced to help homeowners who are struggling with repayments. Local councils can now take on some of the debt in return for an equity stake in the property. An additional 10,000 borrowers earning £60,000 a year or less will also be helped into shared equity schemes in conjunction with housebuilders. The measures announced by the Government today should be seen for what they are,” said Barry Naisbitt, chief economist at Abbey. “They are a welcome step to help the most vulnerable in the market but they are not wide reaching reform. "The rescue scheme, which is estimated to help 6,000 people, is clearly beneficial for those that qualify. It is in everyone's interest that people stay in their homes and lenders already have measures in place to ensure that everything that can be done to help people who are struggling with mortgage payments. A challenge for the authorities will be to decide who is eligible to receive their help and who is not. "The shared equity initiative, which will assist first time buyers with a joint or single income of less than £60,000 and will be part funded by developers, is another welcome development - but again a marginal one. The question is whether people do want to take the step to buy now, in which case the scheme will clearly help, or whether they would rather wait to see if house prices fall any further. "The temporary increase in the stamp duty threshold to £175,000 will reduce costs for in the region of 100,000 borrowers at the lower end of the market. This level is much more consistent with the average house price given the last decade of growth, although it could be argued that the Government has missed an opportunity to reform stamp duty more fully. We would like to see the slab taxation system replaced with a progressive one, so there is less distortion in the market around each threshold. "So, to summarise, while these moves undoubtably have a positive social impact on some lower income and vulnerable people, they are extremely targeted and are likely to have only a limited impact on the rest of the housing market."
Date: 3rd, September, 2008
Author: Ben Wilkie
ADVICE TO READERS
While this website is checked for accuracy, we are not liable for any incorrect information included. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions.
Enter your postcode here to find out how much your property is worth, based on Land Registry data.
Enter the following information to calculate the amount you can borrow.
First Income: |
|
Second Income: |
|
RSS Feed
Delicious
Digg
reddit
Facebook
StumbleUpon