Don't break open the Champagne just yet, there's not much good news in the Budget for homeowners. If you're a low-income homebuyer, the new measures announced could help you onto the property ladder. But if you're not eligible for one of the Government's special schemes, be prepared to struggle on regardless.
By Caroline Bloor
So far, take up of affordable housing has been slow. But the Government has said it's committed to building an extra 70,000 new homes a year for rent or purchase by 2010-11.
There are still no plans to raise levels of Stamp Duty in general. But if you are on a low income and buying through one of the Government's shared ownership schemes, you won't have to pay stamp duty on the property until you own 80 per cent of the equity. This measure, says Helen Adams from www.FirstRungNow.com 'will benefit very few individuals.'
Last year, Stamp Duty revenue from residential property sales rose by 40 per cent to a record £6.4bn.*
There's some good news for key workers and first time buyers planning to buy property through a shared equity Open Market HomeBuy scheme. They will be able to borrow a higher percentage of the money needed to buy their property. The minimum stake has been reduced from 75 per cent to 50 per cent.
'Equity share mortgages are a good option in principle, but they benefit so few borrowers that they are of absolutely no use for reigniting the stagnating mortgage market,' says Louise Cuming, head of mortgages at www.moneysupermarket.com. 'The choice of products under this scheme remains limited and it can be difficult for customers to find a package that that suits them.'
There wasn't much to cheer homeowners currently struggling under the credit crunch. But a commission has been set up into how long-term fixed mortgages might help first time buyers to get on the housing ladder in future.
The idea of long term fixed rate mortgages won't appeal to all, however, says Andrew Hagger, www.moneyfacts.co.uk: 'If due to lifestyle changes such as a marriage breakdown, long term unemployment or inability to work due to illness a homeowner needs to switch their mortgage mid term, the early repayment penalties can provide considerable problems.'
*Halifax research, 10th March 2008.
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