Darling Opens Door to Stamp Duty Suspension

Stamp duty could soon be suspended as the government bids to stimulate mortgage lending once more.

In an interview with BBC Radio 4's Today programme earlier today, chancellor of the exchequer Alistair Darling refused to rule out the tax being temporarily scrapped in order to encourage people to buy homes. Currently, the levy is imposed on all home sales in the UK, with the amount charged dependent on the home's asking price.

The mortgage sector has been beset by the lingering effects of the credit crunch over recent months. A rise in the rates of inter-bank lending caused by the financial crisis has led to many of the more attractively-priced loan deals on the market either having their own rates revised upwards, or even being withdrawn by lenders altogether.

In turn, this has had a serious impact on the number of home loans being granted. Figures from banks show that mortgage approvals currently stand at less than half their level of a year ago.

Moreover, the attendant decline in house prices - measured at over eight percent over the past 12 months by lenders Nationwide - has also discouraged many from buying.

Mr Darling commented: "[We will] further measures in the autumn to help people with housing and through them the housing market…I'm not going to be drawn on [stamp duty] today because we have not concluded what exactly we need to do."

He added: "It's helping people that's important - I want to look at a range of options that will help people."

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