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Chancellor 'didn't go far enough'.

Byline: Mieka Smiles

PROPERTY experts have welcomed the initiatives set out by the Budget to boost the housing market - but said they did not go far enough.

Chancellor Alistair Darling announced a range of proposals aimed to help home buyers and stimulate the property market.

The stamp duty holiday on properties costing up to pounds 175,000 was extended until the end of this year.

But Mr Darling was criticised for not reforming the tax altogether.

Adrian Coles, of the Building Societies Association, said the extension of the exemption would not boost the market "substantially".

He said: "We are urging the Government to take this a step further by researching how the stamp duty system could be reformed to reduce the distortions from the current 'slab' structure of the tax that results in the bunching of transactions at prices just below the thresholds for different rates." Mr Darling also announced pounds 500m of extra support to kick-start building on housing projects which have stalled, including pounds 100m for councils to build energy-efficient housing.

Many private developments have been mothballed or not started as builders struggle under the problems in the financial markets, which have made it harder for people to raise mortgage finance. Builders have seen share prices plummet amid concerns that they could breach their banking covenants, while they have also been forced to write down the value of land banks and shed thousands of jobs.

The Government also announced that it was allocating an additional pounds 80m to HomeBuy Direct, its shared equity mortgage scheme, which aims to help first-time buyers get on to the property ladder and others back into the market.

Other measures to help homeowners included increased support for mortgage interest payments for people who have lost their jobs.

But several commentators said this was not a new package and simply a "re-announcement".

Tory leader David Cameron said: "The homeowners' mortgage protection scheme was the centrepiece of the Queen's Speech last year and now, four months later, they've just announced it all over again." Michael Henning, a North East-based chartered surveyor and RICS regional board chairman said: "The Chancellor has recognised the need for assistance to the housing market as essential to helping Britain's economic recovery."

Stewart Baseley, executive chairman of the House Builders Federation, said: "We are delighted that money has been made available to unlock mothballed sites. We now need to work with Government get work started as quickly as possible. The benefits of doing so are clear in terms of employment and for the wider economy." The National Housing Federation said the Government had taken a step in the right direction but had not been bold enough.

Chief executive David Orr said: "The Government is right to take a stake in housing projects where work has stalled and to make it easier for social housing to be built, but needed to go further. The Chancellor should have backed our call to spend pounds 6.35bn on helping housing associations deliver 100,000 new social homes over the next two years.

"We fear that because the Government has failed to back a comprehensive building programme the number of homes delivered this financial year will slump to an 88-year-low of 70,000, while the number of people on social housing waiting lists will simply soar to unparalleled levels."

BUDGET PROPERTY FOCUS MEASURES announced in this week's Budget to help to boost the housing market included: Extended stamp duty holiday until December 2009 Extending the stamp duty holiday may help some buyers who do now seem to be entering the market but will only have a major impact if steps to increase levels of mortgage lending are also effective.

Extension of HomeBuy Direct HomeBuy Direct has proved popular with housebuilders, mortgage lenders and first time buyers.

The Government uses this scheme as a way of helping buyers suffering as a result of restrictions on mortgage lending. Extending the scheme will help first-time buyers and can help avoid high loan to value mortgages.

Government guarantees for mortgages Addressing the availability of mortgage funding is a key factor in unblocking the depressed UK housing market. This should allow the recent increase in buyer inquiries to translate into an increase in sales.

Restarting stalled projects Funding to restart stalled housing projects is essential if the number of homes built is to rise from current record lows.

Completing partly built developments can have an immediate impact on both housing supply and keeping skilled workers within the industry as they will not have to go through long and costly planning processes.

Regulatory system to support housing objectives A detailed reading of the Budget report section on housing indicates that Government plans to work with the sector to identify a regulatory and policy framework to support its long-term housing objectives.

pounds 435m for energy efficiency improvements to homes, businesses and public buildings The Government has a commitment to reducing carbon emissions by 34% by 2020..
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Publication:The Journal (Newcastle, England)
Date:Apr 25, 2009
Words:824
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