ROOF Blog

First-time buyers were dealt a blow in the pre-budget report when the chancellor announced that the current stamp duty holiday would not be extended beyond the end of the year.

Alistair Darling also scrapped plans to raise the threshold for inheritance tax from £325,000 to £350,000. Currently, anyone buying a property for £175,000 or less avoids paying one per cent stamp duty.

This threshold has been in place since September 2008 when the chancellor increased it from £125,000.

Since the stamp duty holiday was introduced, about 132,500 house-purchase mortgage transactions have escaped the tax, according to research by the Council of Mortgage Lenders.

This accounts for more than a quarter of the 486,400 house purchase loans in the period.

The meltdown in the American housing market is not over yet, with experts warning that a rise in home foreclosures next year and in 2011 could undermine the chances of a sustained economic recovery in the United States.

The Obama administration has set aside $75 billion (£46 billion) under its homeowner bailout plan, known as the Home Affordable Modification Programme, to allow up to four million American homeowners to reduce their monthly mortgage payments and keep them from defaulting on their loans.

Yet despite efforts by the US Treasury Department to step up pressure on mortgage companies to modify more loans, take-up has been slow and the programme has been widely condemned for providing insufficient help to borrowers who have lost their jobs or who owe more than their homes are worth.