With the British economy forecast to slip into recession, Prime Minister Gordon Brown's government on Tuesday unveiled a raft of measures to perk up the housing market -- and its own flagging fortunes.
The Treasury said homes worth up to 175,000 pounds (215,000 euros, 311,000 dollars) would be exempt from property sales tax, or stamp duty, for a year, and also laid out steps to help first-time buyers and to help homeowners at risk of repossession.
Many Britons are struggling to borrow money from banks for mortgages because of the credit squeeze that followed the US subprime home loans crisis, and Britain is experiencing a prolonged property slump alongside high inflation and interest rates.
Prime Minister Gordon Brown said the measures would help Britain get through "a difficult situation and show that our economy is resilient."
"Homeowners need to know that we will do everything we can to keep the housing market moving forward," he said.
House prices in Britain fell 1.7 percent in July on June levels, dropping for the fourth month running, and were down 8.8 percent from a year earlier, according to figures from home loan provider Halifax.
The average British home cost 177,231 pounds in July, Halifax said. The Treasury estimates the tax break will cover half of all house sales in the next year.
The government has been accused of talking the economy down after finance minister Alistair Darling said in an interview published Saturday that conditions faced by Britain and the rest of the world "are arguably the worst they've been in 60 years.”