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Government throws more money at housing market

A £1 billion housing package has been announced by Communities Secretary Hazel Blears MP to help get the housing market moving again.

Government throws more money at housing market

The Chancellor of the Exchequer has already today announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less.

The new measures announced by Blears will help first time buyers struggling to get onto the housing ladder, support vulnerable homeowners at risk of repossession, and support the house-building industry.

They include:

  • a new £300m shared equity scheme (called HomeBuy Direct) to offer 10,000 first time buyers currently frozen out of the mortgage market the chance to get onto the property ladder .

  • Support for up to 6,000 of the most vulnerable homeowners facing repossession to remain in their home through a £200m mortgage rescue scheme;

  • A £400 million boost in spending power for social housing providers, including registered social landlords and councils, to deliver 5,500 more social houses over the next 18 months by bringing funding forward;
  • HomeBuy Direct will give eligible first time buyers keen to own a place of their own the chance to buy some newly built properties. Buyers will be offered an equity loan of up to thirty per cent of the value, co-funded by the government and the developer, free of charge for five years. As with other HomeBuy schemes, any first-time buyers whose household income is under £60,000 will be able to apply.

    This is designed to also support the industry by identifying buyers for their new homes and help the housebuilding industry, 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.

    Blears said: “This Government is committed to practical action to help those most affected by the current state of the housing market. We are working to make sure everyone struggling to pay the mortgage gets support and advice. We are giving a leg-up to first-time buyers keen to own a place of their own. And by bringing forward our investment in social housing, we are both getting more decent, affordable housing ready for people to live in sooner, and helping the house building industry weather tough times.”

    Housing Minister Caroline Flint said: “We are determined to continue to do everything possible to promote long- term stability and fairness in the housing market. The measures announced today will go significantly further in supporting families who may be facing difficulties at the moment, while ensuring we maintain our focus on delivering more affordable homes over the long term. We must ensure that repossession is only ever a last resort. The Government is determined to play its part, and others must do the same. Lenders should be exhausting all avenues before repossessing, including looking at how they could extend mortgage rescue schemes to householders.”

    In a third step, the Department for Work and Pensions (DWP) have announced new support measures to help vulnerable homeowners meet their mortgage interest payments.

    Editor’s blog on the subject, click here

    About Fiona Russell-Horne

    Group Managing Editor across the BMJ portfolio.

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