Budget fails to address demand for homes
Housing bodies welcomed the announcements in yesterday’s Budget, but warned more will be needed to meet demand for affordable housing.
Chancellor Alistair Darling announced a range of measures, including an exemption on stamp duty for first time buyers purchasing homes valued under £250,000, and financial penalties for local authorities that do not bring enough land forward for development.
He also outlined proposals to cut housing benefit bills by omitting the most expensive properties in an area from calculations, and to combat financial exclusion by making bank accounts more widely available.
A major announcement on council housing finance is expected today.
Richard Capie, director of policy and practice at the Chartered Institute of Housing, said: ‘Behind the headlines of the Budget speech is news of two announcements on finance and land supply that should be most prized by the housing sector.
‘They are tantalisingly close and making sure these changes don’t get lost in the noise of the election must be one of the sector’s priorities for the coming months.’
The National Housing Federation welcomed the proposals on stamp duty and bank accounts, but said housing should be given the same protection from funding cuts as health, education and policing.
Mr Darling warned that public services face the ‘toughest cuts for decades’, but said those would be delayed to avoid damaging economic recovery.
NHF chief executive David Orr said: ‘If the chancellor does push ahead with cuts to the affordable housing budget, the consequences will be dire for lower income families. Fewer social homes will be built, waiting lists will continue to spiral upwards and millions of Britons will be condemned to living in substandard housing for a generation more.’
Other Budget views
Imtiaz Farookhi, chief executive, NHBC
‘The package of measures will help the market and the industry, but nobody should underestimate the challenge in providing the nation with the number of new homes it requires. One major concern across the industry is regulation, especially in the planning system – so the measures announced to reduce those regulatory burdens will be welcomed by many.’
Marc Vlessing, director of affordable housing developer Pocket
‘The government should focus its attention and resources on measures to increase housing supply rather than demand. The UK’s housing market is chronically undersupplied and fails to deliver the right kind of homes, on the scale required, to meet actual housing need. In these circumstances, two year measures to boost affordability for the few are not an adequate long-term response.’
Rebecca Bennett Casserly, head of residential affordable, EC Harris
‘The raising of the stamp duty threshold for first time buyers is welcome, helping to further energise the housing market. However sustainability should also be a top priority, with particular focus on incentives for the retrofit market. A zero rate of VAT on all construction associated with environmental sustainability (and affordable warmth measures) could have a marked impact on workload for SMEs and regional contractors for example.’
Simon Rubinsohn, chief economist, RICS
‘RICS believes that greater reform of stamp duty is still needed. The current slab structure, where a higher rate applies to the whole value of a transaction, should be replaced with a marginal system similar to income tax. This would smooth out distortions in the market and can be done on a revenue neutral basis. The government should also consider reshaping the tax by introducing a new band for higher value properties.’
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Readers' comments (4)
alex kendall | 25/03/2010 9:01 am
The great and good what do they know meaningless platitudes = sweet fanny Adams. One thing is clear the phoney war is now over but as usual it will be housing that takes the hit.....Bye bye HCA......???
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the purple avenger | 25/03/2010 11:35 am
We will all get cuts across the board. Housing, NHS, Police, local authorities. No-one will escape (except perhaps from the civil service and all of that expensive, outdated pomp and ceremony around parliament). Lobby groups will complain and campaign - but at the end of day if there is not enough cash, which there isn't, then we will all suffer. Housing is not a special case so we should prepare for the worst. I wonder if by any chance the cuts are delayed due to the election rather than any thought about the recovery?
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Melvin Bone | 25/03/2010 12:03 pm
The 10% increase in cider duty will hit me more than anything else.
This was a figure fiddling budget whilst the election looms.
Good news on the LHA front with the top properties removed from the equation, that should stop a few Daily Mail headlines.
The merger of the Courts Service and Tribunals Serviceis an interesting aspect.
The devil, as ever, is in the detail and that will take a few days to trawl through...
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Steve | 25/03/2010 5:11 pm
Housing, transport and some other areas will take the greater hits so that the NHS and Education don't. And 'front line' services, whatever they actually are...
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