The Inside Edge
Online property portal Look4aproperty.co.uk have announced a £1 billion loan package to stimulate the UK housing market by offering interest free loans to homebuyers to cover the costs of stamp duty, legal fees and other unavoidable costs associated with homebuying.
The scheme, backed by Hitachi Capital (UK) PLC, will be offered out through selected estate agents (presumably those with accounts to advertise their properties on look4aproperty.co.uk).
James Caan became the Chairman of look4aproperty last year when he took a 25% stake in the business through the investment arm of his business Hamilton Bradshaw. In a statement at the time Caan referred to ‘plans to announce a series of new products to kick-start the struggling UK housing market in the New Year’.
Caan and his business partner Aaron Turner, who built the business, believe that stamp duty is ‘one expense too far for many people’ as it cannot be bundled into the home loan. Their theory is that by making the moving process more affordable it will encourage more buyers into the market to stimulate activity and growth.
In a statement Caan said:
“This scheme gets rid of those financial obstacles which are holding up the housing market. This means that thousands of people who have been putting off moving or buying their first home can now climb up the property ladder without further delays.”
Stamp duty explained
You pay ‘Stamp Duty Land Tax’ (SDLT) when you buy property.
New thresholds introduced from 3 September 2008 mean that if you buy property and the purchase price is £175,000 or less you don’t pay any SDLT at all.
If it’s more than £175,000, you pay between one and four per cent of the whole purchase price, based apon a sliding scale. The £175,000 threshold (up from £125,000) will remain in place up to and including 31 December 2009.