Page last updated at 11:20 GMT, Tuesday, 2 September 2008 12:20 UK

Home buyers weigh up aid measures

Cameron Christie
Cameron Christie will now not have to pay stamp duty on his new flat
The government has announced a package to help first-time buyers and those struggling to pay their mortgage.

It is suspending stamp duty for properties worth up to 175,000 - 50,000 more than the current threshold.

Also included is a shared equity scheme, and "free" five-year loans of up to 30% for some first-time buyers.

Here, some first-time buyers and people in danger of repossession say what they think.

Leanne Donaldson, 28, an administrator, and her partner Paul Langford, 25, an IT worker, are in danger of losing their home in Cheshire.

They are struggling to keep up with the cost of living and fear negative equity if they sell their two-bedroom house.

They earn a combined total of 30,000 and said they purchased their home in September 2007 for 116,500, opting for a five-year mortgage deal with Northern Rock, at a fixed rate of 5%. They borrowed 122,500. Repayments cost them 800 per month.

"We can't afford to live," says Leanne.

"Food prices have gone up and so has the cost of gas. We don't have any spare money. We have to shop around for bargains, we can't afford new clothes and we can't afford to go on holiday.

Paul Langford and Leanne Donaldson
Leanne and her partner: "We can't carry on living like this"

"We're worried about the house being repossessed.

"We've already missed a couple of payments - one last Christmas for presents and one because the car broke down and we had to use the mortgage money to fix it.

"If we miss any more they'll start to threaten us.

"The council helping out with payments in return for a stake in our house would be of interest.

"We are also definitely going to look into the council buying our house and renting it back to us. We will be looking at the websites tonight to find out what our options are.

"We've looked into getting an interest-only mortgage, but that would only lower our payments by 75 a month.

"We also want kids, but we can't afford to have them.

"We can't carry on living like this. We would like to do something about it sooner rather than later."


Cameron Christie, who works in financial services, has been trying to get on the housing ladder for the last few years.

He is now buying a one-bedroom flat in London for 145,000, so he will benefit from the stamp duty exemption.

"I'm very happy," he says. "I just got a freebie today that I wasn't expecting.

"I've also been trying to get information about the 30% loan but there doesn't seem to be much information around.

"I've e-mailed Hazel Blears' office but I'm still waiting for a reply."

Mr Christie is not sure the government will achieve what he considers to be their aim with these measures.

"I was buying a house anyway, and now the taxpayer is paying my stamp duty so I'm very happy. I'm not sure it will get the government re-elected, though."


Lecturer Lisa Hackett and her partner are living in a flat owned by a family member while they try to get on the housing ladder.

Although they have a deposit and would therefore not benefit from the "free loan" offered by the government, they are having problems getting the right mortgage.

This will help current owners but not first-time buyers
"We can't get a big enough mortgage because I'm freelance so my salary doesn't count.

"The mortgage calculations are therefore only based on one income so we can only be cleared for 90,000.

She says that for that price they could only get a one-bedroom flat in Sussex - which would suit them at first but not once they start a family.

She believes the housing market is due for a correction and that the government would have been better off doing nothing.

"Stamp duty exemption is not much help in a falling market; it could actually help prop up the market. This will help current owners but not first-time buyers.

"I would like to see a market correction and dropped prices. Helping existing home owners will keep prices high.

"Any measure isn't going to help everyone. I think these will make it harder for people like us. On one hand it will help people who are in trouble and I applaud that, but on the other we won't get any help."


Graphic designer Dani Zargel, 37, lives with his 35-year-old wife, Julie-Anne, and their two children, aged six and 10.

He has tried three mortgage brokers since December 2007 but cannot get a mortgage, despite earning 70,000. His wife earns 35,000.

He has no collateral because he lost his house after a divorce.

Dani Zargel
Graphic designer Dani Zargel just can't get the required deposit

He says none of the new measures will help his family because he earns too much to qualify for the "free" 30% loan, and because property prices in his area are so high that he would not benefit from the stamp duty exemption.

"It's also impossible for me to find a deposit in the current climate.

"Food has doubled, fuel has doubled but my salary hasn't doubled. If it did then I could afford to save for a deposit."

Mr Zargel says he would have liked to see the government raise the salary threshold for the "free" loans.

"I can pay a mortgage; I just can't get a deposit.

"I had a house that was worth 450,000 but I walked away from that when I divorced.

"There is no way that I'm the only person in this situation after a divorce."

Key worker Sarah Prodger, 21, earns 22,500 as a paediatric nurse at a hospital in Surrey.

She owns 30% of her shared ownership flat in south-west London, which she bought through Thames Valley Housing two months ago. She pays 320 a month in rent.

Extending schemes like this is definitely a good idea

"It's a brilliant scheme. I own 30% and pay rent on the rest, which means I own a part of my flat. It would have cost 210,000, which I wouldn't have been able to afford on my own.

"Extending schemes like this is definitely a good idea. I qualified in September and managed to find somewhere in just over six months.

"I'm single and my parents don't own a lot of money. It's good for people like me to get a flat on my own so I don't have to be stuck at home until I'm 30. My dad's just retired and hasn't got the money to support me."

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