The Treasury has unveiled a stamp duty holiday that will see the threshold property value lifted to £175,000.

From today until September 2009, any house worth less than £175,000 will not have to pay the 1% stamp duty charge. Until now the threshold property value for the tax was £125,000.

The move will provide an exemption from stamp duty land tax for land transactions consisting entirely of residential property sold for £175,000 or less.

The decision follows mounting pressure on the Government to take action to reinvigorate the housing market, but has been met with anger by many who see it as a weak answer to the housing market crisis in the UK.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association says the move is just to gain votes. He says: "These measures will help certain individuals and have a positive impact on confidence but in no sense are they market transforming. They do nothing to tackle the fundamental issue in the market - the lack of funding which is stopping people get hold of mortgages.”

A spokesman for the Royal Society of Chartered Surveyors says: “Nine out of 10 of total transactions will be unaffected by this band movement.
“The move will have little impact in London where the average price a first time buyer pays is around £260,000. At best the relief will save buyers £1750, a drop in the ocean of the £27,738 we estimate as the average upfront costs of buying a home.”

The Government also launched several other schemes to help homeowners: a first-time buyer loan scheme that will give young potential homeowners up to 30% of the property’s worth, free for five years.

There is also a mortgage rescue package for those facing repossession: struggling homeowners will be allowed to sell part or all of their home to a council or housing association, who will then let the homeowner rent back the property.

There have also been changes to the Income Support for Mortgage Interest: now any homeowner with a mortgage up to £175,000 will be allowed state help with their interest payments after three months if they find themselves in difficulty.

David Harker, chief executive of Citizens Advice says: "These schemes could be an effective way of keeping people who lose their jobs suddenly and have no savings to fall back on in their homes.

"For these measures to work, lenders must play their part by showing forbearance, treating people in difficulties sympathetically and fairly, being willing to negotiate reasonable, affordable repayment arrangements with borrowers, and ensuring they take possession action only as a last resort.”

Caroline Flint, Housing Minister says: "We are determined to continue to do everything possible to promote long- term stability and fairness in the housing market.

“The measures announced today will go significantly further in supporting families who may be facing difficulties at the moment, while ensuring we maintain our focus on delivering more affordable homes over the long term. We must ensure that repossession is only ever a last resort.”

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Borrowers on sub prime mortgages face huge rate hikes of more than £350 a month.

Accoridng to Moneyfacts the number of lenders offering subprime products has dropped from 36 in July 2007, to just 13 now. That means from 8,148 sub-prime residential mortgage products in 2007 there are only 1,252 now.

The website says many lenders realised a few years ago that there was an ever increasing number of people with blemishes on their credit files. Existing lenders added sub-prime products to their range and there was an influx on new lenders offering exclusively sub-prime mortgages - now these unfortunate customers are facing huge rate shocks.

Darren Cook, mortgage expert at Moneyfacts.co.uk, says: "Last year the market for sub-prime was so competitive that some rates being offered were only fractionally higher than standard residential rates.

“Now, as lenders continue to factor in margins for higher risk, sub-prime customers are paying the price with rates up to 2.75% higher than the same time last year.”

Moneyfacts says borrowers who were on a light level of subprime assumed that if they kept on top of their financial affairs once their deal ended they would be able to move to a much cheaper standard residential deal, but due to stricter lending criteria from prime lenders this isn't necessarily the case now.

Cook adds: "Of those that can't get a new standard residential deal, they will need to try and find a new sub-prime deal or have no alternative other than moving onto the revert to rate of their existing deal. With this rate currently standing at 9.43% this could prove costly. "Borrowers could be facing up to a £360 hike in their monthly repayments, which could be a step too far for the majority. As a result we are likely to see more people facing the prospect of repossession as more and more deals come to an end in the near future."

Despite the impact the credit crunch is having on finances, Abbey says it may actually be bringing us closer to our loved ones. Over a quarter of Brits have admitted that they are now less likely to break up with their partner as a direct result of the current economic climate.

Abbey has found that not only are people now less likely to buy a house or find a new property to rent, but a staggering 12.4 million people actually admit that they are reluctant to split with their partner for fear of facing increased bills, rent and general living expenses.

Its also men that are the most reluctant to go it alone, with almost a third admitting that they did not want to be single and face an environment of rising inflation alone. Sisters are happier to do it for themselves, though, with a quarter stating that they were less likely to split with their partner.
Matthew Timms, managing director of cahoots, Abbeys online credit card, says: "There are clearly economic benefits to being in a relationship, such as shared bills, lower rent and even reduced car insurance premiums. The cost of being single can extend to thousands each year, but with a little careful financial planning you needn't be tied to your partner purely for financial reasons."

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More than one in ten homeowners plan to make an overpayment on their mortgage in the coming months.

According to Abbey, this figure is three times more than the number who are planning to take a payment holiday or make underpayments.

The research suggests that paying off the mortgage remains a top financial priority for people and despite a tough economic environment, only 3% of people are taking a payment holiday and only 1% are planning to free up extra cash and make an underpayment.

The Abbey study also found that one in 10 mortgagees will be looking to change their mortgage over the next six months.

In the South East almost one in five people with a mortgage are planning to make an overpayment, while as many as 8% of people in Wales and the South West are planning to take a payment holiday over the next six months.

Phil Cliff, director of Abbey Mortgages, says: "A large proportion of mortgages offer borrowers flexibility and the research shows that many people are planning to take advantage of these benefits. It's great to see that people are quite rightly prioritising their mortgage payments ahead of other financial commitments - having a smaller mortgage can mean you get a better deal when you remortgage and of course reduces future monthly outgoings."

It seems while those who have a mortgage are trying to pay it off, those who do not have a property of their own are deciding not to take on financial burdens. USwitch.com revealed that total mortgage lending and unsecured personal loans have plummeted by £11 billion in a year.

This figure includes secured lending on properties, which with the Abbey statistics, highlights the changing attitudes of homeowners - people want to save, not spend.

The number of unsecured loans issued also dropped by almost 40,000 to only £283 million each quarter over the past year - that decline totals £1.1 billion.

Simeon Linstead, head of personal finance at USwitch.com, says: "In just 12 months, this economic landslide has sent the consumer lending market into disarray. Our research has confirmed that both mortgage lending and unsecured loans are drying up by the day.

“For those with perfect credit records, it's unlikely this will be an issue, but others it could be problematic. In response to this, it seems consumers are turning to credit card providers for extra cash. Whilst it's good news that people can still access extra money if they need it, this is not a sustainable solution for the problem. Ultimately, this has had a huge knock on effect on the housing market.”

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The rental market boomed to record proportions as housing sales diminished all across the UK.

According to the latest Royal Institute of Chartered Surveyors Lettings Survey, new buy to let properties increased at the fastest pace in the survey's history.

RICS says this is due to many would-be-sellers finding that becoming a landlord is a better option than selling in the current climate.

The survey found that 43% more chartered surveyors reported a rise than a fall in new landlords in the second quarter of 2008, compared to 35% in the first quarter of 2008.

RICS surveyors report that frustrated vendors have been placing their property in the buy to let market to let as they have been unable to agree sales due to a lack of demand in the housing market.

Significantly, RICS found that demand for family homes remained stronger than for smaller flats. The Institute says many would be buyers have been forced to rent as the route to mortgage finance has been blocked. 43% more surveyors reported a rise rather than a fall in demand for rented houses, compared to 34% of surveyors who reported a rise in demand for smaller flats.

And rents have continued to rise while house prices fall - RICS says these rising profits have kept landlords committed to the market.

A spokesperson for RICS says: "The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up.

“Many are willing to "hold" and await the return of capital appreciation. Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns. Established investors have been reaping the benefits of the housing downturn for sometime and will continue to do so in the short term. However, ever increasing supply could have an impact on rental growth as tenant options increase."

Peter Bolton King, chief executive of the National Association of Estate Agents, says: "Whilst aspects of this report are encouraging, I remain concerned that the optimism for the next few months may be scarred by the current uncertainty regarding stamp duty.

“The confused messages being sent out by the Government will undoubtedly have an impact on consumer confidence as the public is understandably confused at present about whether to buy or sell. Members of the NAEA have already seen buyers adopt a ‘wait and see' attitude as a result. This of course will have repercussions on the property market as a whole and I fear next month's figures may reflect this halt in proceedings rather than the leveling out in the market place that may have naturally ensued.”

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The Council of Mortgage Lenders, Citizens Advice and Shelter have produced a ten-tip guide for those struggling with debt.

1. The groups say if you are in mortgage debt, talk to your lender. The earlier you tell your lender, the more options available to solve the problem. Options that your lender may consider include: extending the term of the mortgage, changing the type of mortgage, deferring interest payments for a short period, or treating any arrears as part of the original debt.

2. The indebted are reminded that there are many organisations which offer independent money advice such as Citizens Advice, Shelter, National Debtline, and the Consumer Credit Counselling Service. If you have debt problems just call - it’s free.

3. Plan ahead - the groups say if you are coming to the end of a fixed-rate mortgage in the near future start planning ahead for higher repayments and researching the best deals in the market - rates will be higher and there is no getting around it.

4. They also remind people that ignoring your debt problems will only make them worse.

5. A mortgage is a priority debt as if you don't pay this you could lose your home - the groups recommend debt advisers, who can help you plan your budget and pay your priority debts first.

6. If you can't afford your full mortgage repayments, you should talk to your lender and still pay what you can afford - many mortgages offer payment holidays and breaks to help the indebted.

7. Don't ignore letters or telephone calls from your lender; if you are not sure what they mean ask your lender or a debt adviser. The help groups advise opening all mail that is addressed to you because you need to be in the know and on top of your problems to be able to solve them.

8. Always attend any court hearings yourself. Court proceedings do not mean that you will automatically lose your home, they merely act as a final check to make sure repossession is the last resort. Some courts have advice desks and schemes which can provide last minute assistance to those with chronic debt problems.

9. If you are struggling with mortgage repayments you may be tempted to send the keys to your lender or abandon your property - don’t do it. Just because you hand the keys back doesn’t mean your name is removed from the deeds. It’s still your home and you are still answerable for it.

10. Selling your home and renting it back might seem like a quick fix to your debt problems, but many of these schemes offer very little security. They are also not regulated so you will not have access to the same protections as a mortgage holder. There are many other debt solutions out there, and with the right help and advice you can find them.

Michael Coogan, director general of the CML says: "The first step for anyone struggling to pay their mortgage is to contact their lender and get advice. There are a range of options your lender can consider to help reduce or reschedule your payments for a period of time while you get back on your feet.”

Adam Sampson, chief executive of Shelter says: "Getting advice quickly is crucial in helping struggling homeowners keep a roof over their head. At Shelter we often see people when it's too late, but the loss of their home could have been prevented if they had sought our help early on.”

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