Chancellor commits £500M to the housing sector 22.04.2009

Author: David Whittaker Posted on: 22 April 2009

Speaking at this year's Budget, Chancellor Alistair Darling pledged £500m extra for the house building sector, which he says will help the development of thousands of new homes.

Of that £500m, £100m will be given to Local Authorities to produce more eco-friendly green homes.

Darling also pledged £50m to help modernise homes for members of the armed forces.

He said: "We need to help meet the housing demand and we have to work with the building industry to fight the restraints it is experiencing as a result of the credit crunch."

So what does this amount to ? Targeting the funds at infrastructure may help bring forward the 10,000 homes that otherwise wouldn't happen; a drop in the ocean but every little bit helps....and his guarantee support of MBS assets under the Frost recommendations should help too, although if you read our earlier blog about Simon Woolfson's views you might conclude that this should sort itself out soon !!! So "thousands of new homes" should be treated as a low ball figure and not something that will make a big impact on the sector as a whole.

I can't resist a comment about £50M for refurbishing MOD houses for the families of our soldiers many of whom are away from their families far too much because our politicians are over stretching the armed forces yet again - not before time - but much of their accommodation would fall short of what any local council would accept as "fit for purpose" for their own families ! And £50M is well short of the mark of what is needed !

The Chancellor extending the stamp duty exemption to £175,000 until the end of the year is no great surprise and arguably he can't put it back down to £125,000 unless and until the property market is showing real inflationary tendencies probably in late 2010. Withdrawing it earlier would set back property recovery by 6 to 9 months !!

Author: David Whittaker