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Last Updated:  Wednesday, 9 April, 2003, 12:43 GMT 13:43 UK
Brown tackles housing market
Chancellor Gordon Brown has set his sights on reform of the UK housing market.

In his budget, Mr Brown drew a link between boom and bust in the UK housing market and the wider economy.

Britain now has the highest rate of homeownership amongst the major world economies - nearly 70% of households are owner occupied.

However, nearly two-thirds of mortgages are variable rate or fixed for only a short period at the start of the contract.

As a result, when interest rates rise people can find themselves in financial difficulty which can have a detrimental effect on consumer demand.

Chancellor Gordon Brown has frozen the stamp duty on houses and commercial properties, but cracked down on non-payment.

The Chancellor would like to see more long term fixed rate mortgages being taken out thereby moving homeownership out of a boom-bust cycle.

David Miles, professor of Imperial College has been asked to review the UK mortgage market to see how a greater proportion of fixed rate mortgages can be achieved.

As for the current crop of homebuyers, they face having Stamp Duty thresholds frozen for the tax year 2003-04.

The starting rate for Stamp Duty on residential property is 60,000, unless the property is located in designated Stamp Duty free area.

The Consumers' Association welcomed the review.

Sheila McKechnie, director of the Consumers' Association, said: "The Consumers' Association welcomes this major review of the housing market in the UK and looks forward to contributing to it.

"Anything that enables greater certainty in financial planning is to be welcomed in principle."

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