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2 September 2008

Stamp Duty Holiday to Help Buyers

Stamp duty is to be suspended for a year on properties that cost less than £175,000 in a bid to boost the ailing housing market.

The long-awaited freeze on the unpopular levy is to take place with immediate effect, said the Chancellor.

It forms part of an emergency rescue package for hard-pressed home buyers and owners.

Gordon Brown is to unveil the flagship scheme to help people who are facing repossession stay in their homes.

The Prime Minister will hope it can tackle spiralling repossession figures and bolster his approval ratings, after Alistair Darling admitted the economy had hit a 60-year low.

Under the scheme, which will cost £1bn, vulnerable families will be offered the chance to sell their home and rent it back at a cheaper price.

They can sell the property to a registered social landlord who will clear the mortgage and then offer them a cheaper price in rent.

They will also have the opportunity to enter into shared ownership of the property.

The policy is designed to help families struggling with mortgages, but also those attempting to get on to the property ladder.

First-time buyers whose household income is less than £60,000 will be able to buy newly built properties with an equity loan of up to 30% of the property's value.

Communities' Secretary Hazel Blears told Sky News: "This is about those families out there who want to get a house of their own, or those struggling with a mortgage.

"The Government has a responsibility to help," she said.

Recent figures show that the number of homes being repossessed hit their highest level for 12 years during the first half of the year.

Around 18,900 properties were taken back by lenders - 48% more than during the same period of 2007.

Last month the Chancellor was accused of damaging the faltering housing market when he refused to rule out a temporary suspension of stamp duty.

Estate agents claimed this was making buyers "wait and see" what might happen amid already dire house sales data.

Full details of the new package will be announced by Gordon Brown and Communities Secretary Hazel Blears.

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