Sep 3 2008
A major cross–government package of new measures to meet current challenges in the housing market was announced today.
A £1 billion housing package announced by Communities Secretary Hazel 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.
The Chancellor of the Exchequer has also today announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less.
In a third step, the Department for Work and Pensions (DWP) announced new support measures to help vulnerable homeowners meet their mortgage interest payments. The DWP announced it would be reforming Income Support for Mortgage Interest by shortening the waiting period before SMI is paid from 39 weeks to 13 weeks for new working age claims from April 2009. The capital limit for new working age claims will also be increased to £175,000 from April 2009.
The measures announced by Ms Blears, which are the next steps of an on-going programme of action to support the housing market in England, include:
- offering 10,000 first time buyers currently frozen out of the mortgage market the chance to get onto the property ladder through a new £300m shared equity scheme
- supporting up to 6,000 of the most vulnerable homeowners facing repossession to remain in their home through a £200m mortgage rescue scheme
- £100m investment to support SMI reform which could help prevent a further 10,000 repossessions
- 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
- working with Regional Development Agencies to support the most critical regeneration schemes with the most potential to transform their communities.
Communities Secretary Hazel 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 added:
"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."
Minister for Welfare Reform, Stephen Timms, said:
"Our reforms to SMI payments will simplify the system and make it easier for people who are eligible to claim. We will also increase the capital limit for new working age claims to take into account the value of people's homes today. The improved financial help that SMI provides will assist eligible homeowners with their mortgage interest payments should they get into difficulties."
The Government has been taking a pro-active response in addressing the current challenges in the housing market, including making funding available to buy unsold homes off the market, increasing shared equity support for first time buyers, expanding free legal representation in county courts for households at risk of repossession, and providing more debt advice.
We have also strengthened the role of councils by establishing the first Local Authority Housing Companies, giving local authorities a greater say and role in building new affordable housing.