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British government announces measures to ease mortgage squeeze


Published :
Sun, 07 Sep 2008 13:24
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London - The British government Tuesday introduced measures aimed at reviving an ailing housing market by lowering the threshold at which first-time buyers would be liable to a special tax on property purchases. For a period of one year, buyers of a property worth up to 175,000 pounds (315,000 dollars) will be exempt from what is known as stamp duty, a 1-per cent levy on the value of homes. Previously, the threshold was set at 250,000 pounds.

The measures are aimed especially at first-time buyers who have been cut out of the housing market as a result of the credit crunch.

Prime Minister Gordon Brown has also pledged extra measures to assist first-time buyers with mortgages and to protect existing home owners from the threat of repossession.

About 3 per cent of new mortgages will be affected by the one-year "stamp duty holiday" expected to cost the government 600 million pounds.

Critics said the measures were "small beer," saving a housebuyer a maximum of 1,750 pounds - which currently equals the monthly rate of house price falls.

The stamp duty freeze is likely to benefit buyers purchasing a property at the current national average of 164,000 pounds, but in London and in the south-east of Britain that average level currently stands at 300,000 pounds.


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