The government has taken a variety of steps to try and aid the ailing mortgage and housing markets, including the launch of a £50 billion mortgage rescue plan several months ago. However, as industry officials had predicted it seems that this plan is taking some time to kick in and there has not been much of an improvement in the mortgage market in the meantime.

Of course, the issues facing the mortgage market and the lack of mortgages available have had a knock on effect on the housing sector, and the level of property sales has fallen to its lowest level in decades with some estate agents selling less than one property a week on average.

In a bid to try and breathe some life back into the housing market the government has recently announced that it is suspending stamp duty for a twelve month period on properties purchased up to the value of £175,000. It is hoped that this move will help first time buyers to more easily afford to get onto the property ladder, and will kick start house sales again. Previously no stamp duty was paid on properties up to £125,000, so the threshold for stamp duty exemption has been increased by £50,000 for a one year period.

However, whilst some people will benefit from the stamp duty suspension by saving up to £1750 on the cost of purchasing a home there are also those that will not benefit from the move, namely those purchasing properties in areas such as London where the average house price is still way above the £175,000 limit. Previously around one third of properties were exempt from stamp duty based on value, and with the increased threshold this has increased to around half of all properties. However, very few of these are likely to be in areas like London where house prices are very high.

Members of the Tory Party have said that the move by the government is simply a short term survival plan for the Prime Minister, and Tory MPs have said that if they get into power they will scrap stamp duty on any property valued at £250,000 or less, which would of course give Londoners more of a chance to avoid these hefty costs.

After announcing the stamp duty suspension the Chancellor, Alistair Darling, said: “We face a unique set of circumstances that we have not seen in generations, where you have a credit crunch and where you have high oil and food prices. But I remain optimistic, as I have said on many occasions before, that we can get through it. We will get through it and today’s measures, helping the housing market, are one example of how the government can help people.”

Will the stamp duty suspension benefit you? is a post from: Glitec Loans