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UK government plans housing market rescue

UK government plans housing market rescue
AP
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First Published: Tue, Sep 02 2008. 01 33 PM IST
Updated: Tue, Sep 02 2008. 01 33 PM IST
London: British Prime Minister Gordon Brown unveiled plans today to spend £1 billion reinvigorating the country’s ailing housing market, which is suffering from the worst crash since the early 1990s.
The measures, which will be formally announced by Brown and communities secretary Hazel Blears later today will target first-time buyers and families at risk of having their homes repossessed.
Under the scheme, first-time buyers with an annual household income of less than £60,000 will be entitled to a free five-year loan worth 30% of the home’s value. It may also suspend the tax that buyers are required to pay on property purchases.
With more existing homeowners at risk of having their homes repossessed because of higher mortgage rates and rising fuel and food costs, the government has also promised to save vulnerable families from losing their homes. In some cases, the government will buy the home from the mortgage company outright and then rent it back to the family at an affordable price.
The measures are aimed at keeping the stagnating British economy from falling into a recession, and boosting the popularity of the ruling Labour Party, which is currently lagging 20 points behind the opposition Conservative Party and is at risk of losing the next election.
The Conservative party has dismissed the measures as a “short-term survival plan” for the prime minister.
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First Published: Tue, Sep 02 2008. 01 33 PM IST