Hang on in there UK buyers. Pretty soon all properties will be below £175,000 - Haha!Stamp duty is axed below £175,000
Page last updated at 08:31 GMT, Tuesday, 2 September 2008 09:31 UK
Stamp duty is to be axed for a year on properties costing less than £175,000 as part of a package of measures being unveiled to help the housing market.
The level at which the 1% purchase tax has to be paid is to be increased from £125,000, from Wednesday morning.
The move - which applies to residential property - would save someone buying a £175,000 property £1,750.
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".
The prime minister has faced a difficult few months, with Labour losing two parliamentary seats in by-elections, the London mayoralty and many councillors in May's local elections.'Resilient'
On Monday, he said the UK faced "unique circumstances", including oil prices trebling and the global credit crunch.
But Mr Brown said the government was "resilient in... dealing with these problems".
He earlier denied a rift with Chancellor Alistair Darling, who had said the country was facing its worst economic crisis in 60 years.
For the Conservatives, shadow chancellor George Osborne said: "We will look at the details of these measures and we will support those that will work.
"But let's be clear, they are not going to help the vast majority of families facing a rising cost of living and falling house prices.
"Nor do they amount to the first instalment of the economic recovery plan we were promised.
"I suspect that what we will see in the coming weeks is a desperate and short-term survival plan for the prime minister rather that the long-term economic plan the country needs."
Liberal Democrat leader Nick Clegg said: "This looks like a hotchpotch of measures thrown together to save Gordon Brown's political skin.
"The social housing stock could be increased far more easily by allowing local authorities to buy up unsold properties and use them for new social housing.
"Yet again the government is desperately scrabbling around for a way to fix problems of its own making." http://news.bbc.co.uk/2/hi/uk_news/politics/7592852.stm