Government’s housing plans ridiculed

The Government’s latest housing measures have been slammed by the industry…

Alistair Darling’s first Budget included the following measures, apparently designed to help FTBs and hard pressed mortgagees:

  • 8 billion pounds pledged boost affordable and social housing over the next three years.
  • Delayed stamp duty payable on shared ownership properties.
  • A plan to strengthen the mortgage market and push for the introduction affordable fixed-rate loans.

Darling commented: “70,000 new affordable homes will be built per year by 2010/11 and share equity schemes for key workers, such as teachers and nurses, and first-time buyers will become available to those who can afford half the value of a property, as opposed to the current three-quarters.

“Long-term fixed rate mortgages can reduce some of the risks of taking out a mortgage, especially for first time buyers and lower income families, and it will help more people get on — and stay on — the housing ladder.”

Darling added: The Treasury, Bank of England and Financial Services Authority will discuss with industry “market-led solutions” to strengthen secondary funding markets. The uncertainty in the financial markets is having an impact on mortgage lenders here in the UK , so I want to take measures that will keep mortgage rates low and stable.”

Shirking responsibility

Darling’s proposals have, however, been greeted with widespread criticism. Nicholas Leeming, director of property portal, accused the Government of “Shirked its responsibility” and “blowing smoke around the issues in an attempt to disguise inaction.”

The NAEA were equally scathing, arguing that the Government had ‘once again side-stepped the real issue in the housing market’. Chief Executive Peter Bolton King, added: “We have made repeated calls for a full revision of stamp duty. 

“Recent reports show that the average stamp duty bill for first-time buyers has almost doubled over the last five years and total stamp duty revenue from residential property sales in the UK rose by 40% in 2006/07 to a record £6.4bn.*  This is taxation gone mad! 

”This government needs to realise that the housing market is slowing and the gravy train is over.  This was an opportunity for the Chancellor to give the housing market the boost it really needs to keep the market moving but he has failed the British homeowner again.”

No imagination

Robert Bryant-Pearson, Chief Executive of Allied Surveyors, accused the Government of a ‘lack of imagination’: “The Chancellor has showed no imagination in his first budget for first time buyers. He appears out of touch with the current state of the housing market and his proposals for shared ownership stamp duty exemptions barley scratched the surface of problems faced by the majority of first time buyers.

“What does it take for Government to realise that stamp duty reform is long overdue. How much longer with it put its head in the sand instead of making credible policy decisions?”

David Bexon, Managing Director,, commented: “The Chancellor has made it clear that he cares little for first time buyers across the country by ignoring the potential benefits of scrapping stamp duty for those would be buyers.

In some parts of the country first time buyers need the equivalent to an entire year’s salary in upfront costs to buy a property – this is simply not realistic.