The 2009 Budget was in part aimed at restarting the housing industry, from mortgage availability to new build schemes currently on hold. The Chancellor Alastair Darling pledged to start a scheme to guarantee mortgage backed securities to boost lending, confirmed that the stamp duty holiday for homes up to £175,000 will be extended to end of year and also declared an extra £80m for shared equity mortgage schemes.
He also pledged £500m to kickstart stalled housing projects – including £100m for local authorities to build energy efficient homes as well as £50m to upgrade housing for the armed forces. These moves are calculated to ensure the Government’s target to build 240,000 homes a year by 2016 remains possible in the current climate.
Gillian Charlesworth, RICS Director of External Affairs commented: ‘The Chancellor has recognised the need for assistance to the housing market as essential to helping Britain’s economic recovery. Government action to support mortgage lending should help translate buyer interest, which has picked up in recent months, into actual sales. Additional funding for HomeBuy Direct and extending the stamp duty holiday should also encourage those wishing to get on the housing ladder. Measures announced by the Chancellor will help move towards a sustainable and vibrant housing market for the future.’
However, others in the industry seemed to think the stamp duty holiday too little too late. Lee Watts, Managing Director of Kinleigh Folkard & Hayward said: ‘Stamp duty is an obstacle for many buyers, particularly struggling first timers who find getting a foot on the property ladder in London more difficult than most. However, it is important to remember that, even in a struggling economy, there are very few properties available within London under the £175,000 threshold, so first time buyers in the capital won’t really benefit. Less than 5% of the properties that we are currently selling would benefit from the stamp duty break that is being offered.
‘The Chancellor could have chosen to rework the levels of Stamp Duty entirely, but in the absence of cuts across the board, this extended holiday will offer some relief to the market.’
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