The Chancellor of the Exchequer, Alistair Darling, recently announced that from 3rd September 2008 to 2nd September 2009 stamp duty will only be paid on properties purchased for over £175,000, an increase of £50,000 over the previous figure of £125,000. The difference in stamp duty will see some home-buyers up to £1,750 better off.

The announcement on stamp duty formed part of a £1bn series of measures put forward by the Government aimed at stimulating the troubled housing market. Other measures offered by the Government included free loans of up to 30% to be offered to first-time buyers as part of a shared equity initiative called Home Buy Direct, the introduction of a mortgage rescue scheme and reforming the system of Income Support for Mortgage Interest by shortening the waiting period from 39 to 13 weeks.

Lucian Cook, director of residential research at Savills, told PIN: “The suspension of stamp duty up to £175,000 is likely to have limited impact on the problems in the housing market. The cost saving is not considerable enough when compared to the level of equity that is now needed to buy a home. The lack of access to competitive mortgage finance has led to the downturn of 2008. Buyer confidence has been severely hit and this change will not affect sentiment. What it does do is give the message that the Government is aware of the problem and that it is taking some measures.”