More help to boost housing market

Chancellor Alistair Darling has announced plans to extend the stamp duty holiday on properties costing up to £175,000 until the end of this year.

Making the announcement in the Budget, the Chancellor said that as a result of the extension 60% of homebuyers would not be liable for the tax.

In September 2008 the Government decided to temporarily end stamp duty on properties costing up to £175,000, up from the previous £125,000 threshold, for one year.

It was hoped that the tax relief would boost the beleaguered housing market and increase business for the construction sector.

Now the Government has said that the measure will continue until the end of the year in an attempt to prevent a prolonged recession and kick start the property market.

In the Budget Mr Darling also announced £500 million of extra financial support to restart housing projects, after many have ground to a halt because of lack of funds.

Of this money £100 million will be used to build new energy-efficient housing.

Stewart Baseley, executive chairman of the House Builders Federation, said: "We are delighted that money has been made available to unlock mothball sites.

"We now need to work with Government to identify sites and get work started as quickly as possible. The benefits of doing so are quite clear in terms of employment and for the wider economy."

Many private developments have been postponed as a result of the credit crunch because of the problems in the financial markets, which have reduced the demand for properties following mortgage restrictions placed on buyers.

Share prices for building companies have also slumped amid concerns they would breach their banking covenants, and thousands of jobs in the sector have been axed.

The Government has also announced that it will allocate an additional £80 million to HomeBuy Direct, its shared equity mortgage scheme, which aims to help first-time buyers get on to the property ladder.

There will also be more support for mortgage interest payments for people who have lost their jobs and are looking for work and moves to build a further 10,000 homes in England in the coming two years to help the housebuilding industry.