£500 million announced for stalled housing projects; Stamp duty ‘holiday’ extended to end of 2009; £430 million to improve energy efficiency of buildings
- The economy will shrink by 3.5 per cent this year. In 2010 the economy will grow by 1.25 per cent.
- Borrowing will be £175 billion, 12 per cent of GDP
- Government debt will be 59% of GDP in 2009, rising to 79% by 2013-14
- £430 million to help improve the energy efficiency of buildings - target of 34 per cent reduction in UK carbon emissions by 2020.
- £500 million to kickstart building on housing projects that have stalled because of the credit crunch.
- The stamp duty ‘holiday’ for properties sold for less than £175,000 will be extended to the end of this year.
- £50 million to modernise housing for armed forces.
- Extra cash for the mortgage rescue scheme, as evidence that rising unemployment is threatening more people with repossession than anticipated.
- For home owners, Darling will extend, for six months, a scheme to help people pay their mortgages when they lose their jobs.
- Income tax for people earning over £150,000 to increase to 50 per cent in April next year.
- £1.7bn to help jobseekers - guarantee of work or training for under-25s.
- Government will make about £15bn of ‘efficiency savings’.
- From next month until March 2010 motorists will get a £2,000 discount on new cars if they scrap cars older than 10 years
- £750 million for emerging technologies
- £525 million support over next two years for off-shore windfarms
- £435 million of extra support will be provided to deliver energy efficiency measures for homes, businesses and public buildings.
PROFESSIONAL COMMENT ON TODAY’S BUDGET
An injection of £500m into stalled development seems to be just a market headline grabber! The money is mainly going to come from savings on government property costs which are some years away. The singular difference between the Government’s approach to resolving the economic crisis and the market’s, is the Government is just trying to resolve the situation through Keynesian economics. The market is looking for tax incentives which are seriously lacking! Increasing tax for people earning more than £150,000 is totally counterproductive as it will be the country’s entrepreneurs that lead us out of recession and not the Government.
AukettFitzroyRobinson Chief Executive Nicholas Thompson
The 2009 budget carries little positive news for the industry amidst a global economic crisis. Regretfully, the Government in the current economic climate has found it impossible to make a significant investment in the long-term future, whether in housing or infrastructure. Amongst the few chinks of light is the stimulus for housing, but the 10,000 homes is a fraction of what is needed.
RIBA President Sunand Prasad
The Chancellor has missed a golden opportunity to help build Britain out of the recession. A £5 billion package would have created 55,000 new jobs as well as help increase the supply of much needed homes. A cut in VAT to five percent would have helped to bring the 300,000 empty homes back into use. Instead the Chancellor has let the opportunity slip by and those wanting an affordable home will be forced to wait even longer.
The Federation of Master Builders
The Chancellor’s announcement that carbon emissions will be cut by 34% by 2020 is a historic commitment. But targets need to be backed up by action. It’s good to see extra money for cutting carbon in social housing, additional investment in low carbon new homes and some funding of green refurbishment in public sector buildings. But this falls short of a comprehensive strategy to put low carbon buildings at the heart of economic recovery. More could have been done to really make green refurbishment affordable and attractive to both home owners and businesses, in order to both cut carbon emissions and create green-collar jobs.
Paul King, Chief Executive of the UK Green Building Council
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. The end of the holiday needs to be well managed and one possibility would be to reform stamp duty from the current slab structure to a marginal system like income tax. Without changes to the system the end of the holiday could cause serious distortions to any upturn in the housing market.
RICS response to extended stamp duty
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.
RICS general response
‘The proposed £1billion boost to move housing projects along should be very worthwhile particularly if this initiates a start up in new houses being built. Architects working on both private and social housing have seen a huge drop-off in their work and anything the Government can do to help kick-start this would hugely help that large number of practices.’
RIBA response to housing package