What a week for the mortgage market? After months of speculation the Government announced large scale and important changes to Stamp Duty and help for first time buyers yesterday.

Designed to stimulate the housing market, the principle change is that Homebuyers will not have to pay stamp duty on properties costing £175,000 or less for the next 12 months.

The government estimates half of all property transactions will now be exempt from stamp duty, which is up from one third when the threshold was £125,000, but this means the measure will cost the government £600m.

There will be some who have concluded sales in the past few months who will feel cheated by this measure as they could have saved thousands by waiting a few months. For those affected during the next year it will be a great help.

There is likely to be an immediate ‘bounce’ in the housing market as the many transactions that had been on hold while the stamp duty uncertainty continued are now finalised.

In the current political climate there have already been questions asked about the motivation for the Government delivering this aid package. For the moment though this is irrelevant.

The market needs time to adjust to these new conditions and then we will be able to see if the effect is simply a short term bounce or long term improvement.

This entry was posted on Wednesday, September 3rd, 2008 at 8:08 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.