Sturgeon in UK housing cash plea

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The chancellor must do more to help Scotland's housing market and homeowners who have lost their jobs, according to the Scottish Government.

Deputy First Minister Nicola Sturgeon has written to Alistair Darling ahead of his pre-Budget report.

Ms Sturgeon called for major investment in affordable housing and tax breaks to help landlords maintain their stock.

She also wants a quicker introduction of planned improvements to a scheme which helps struggling homeowners.

Currently, under the Income Support for Mortgage Interest (ISMI) scheme, the UK Government helps pay interest on mortgages under £100,000 after the first nine months of arrears.

It has already announced plans to shorten the waiting period and cover mortgages up to £175,000, but the Scottish Government wants to see these changes implemented by January 2009.

Ms Sturgeon said a permanent reduced VAT rate of 5%, for Registered Social Landlords repairing and maintaining their housing stock, would help the construction industry.

She also called for a temporary reduced VAT rate of 5% for homeowners repairing their homes.

'Gilt-edged opportunity'

The deputy first minister went on to ask Mr Darling to address some of the barriers that hinder large-scale investment in housing, including "anomalous" stamp duty rules.

Ms Sturgeon said: "Next week, Alistair Darling has a gilt-edged opportunity to do the right thing by lending a helping hand to boost Scotland's housing industry.

"There has never been a more opportune time for the chancellor to inject significant funding for much needed affordable housing across Scotland.

"At a time when so many jobs are being lost, he should also provide a boost for Scotland's construction sector".

On Monday, in his pre-Budget report, the chancellor is expected to announce immediate tax cuts and an expansion of public spending to help boost the economy.