Behind the headline grabbing stamp duty changes announced yesterday was a whole raft of other measures designed to steady the housing market and provide help to those affected. 

These include:

•  Interest free five year loans of up to 30% of a property’s value for first time buyers of new homes in England.
• The extension of powers for councils and housing associations to be able to pay off debt for homeowners who can no longer afford mortgage payments and then charge rent.
• The shortening from 39 weeks to 13 weeks the period before Income Support for Mortgage Interest is paid.
• And finally, bringing forward spending from future years to encourage more social housing to be built. 

Under the new loans system, called HomeBuy Direct, households in England earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers. 

Once the five-year interest free period is up, homebuyers will be asked to pay a fee, the Department for Communities and Local Government said - although no more detail of this was provided.

The idea is that not only will HomeBuy Direct help first-time buyers but it will also help the house-building industry weather difficult conditions. Two birds with one stone, but it remains to be seen if it will actually work.

What a week for the mortgage market? After months of speculation the Government announced large scale and important changes to Stamp Duty and help for first time buyers yesterday.

Designed to stimulate the housing market, the principle change is that Homebuyers will not have to pay stamp duty on properties costing £175,000 or less for the next 12 months.

The government estimates half of all property transactions will now be exempt from stamp duty, which is up from one third when the threshold was £125,000, but this means the measure will cost the government £600m.

There will be some who have concluded sales in the past few months who will feel cheated by this measure as they could have saved thousands by waiting a few months. For those affected during the next year it will be a great help.

There is likely to be an immediate ‘bounce’ in the housing market as the many transactions that had been on hold while the stamp duty uncertainty continued are now finalised.

In the current political climate there have already been questions asked about the motivation for the Government delivering this aid package. For the moment though this is irrelevant.

The market needs time to adjust to these new conditions and then we will be able to see if the effect is simply a short term bounce or long term improvement.