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London, 22 April 2009 – As the economy is facing its worst recession since the early 1980s, the measures announced in the 2009 Budget demonstrate that the government is taking the current woes of the housing market and house building industry seriously. However there were no big surprises announced with the bulk of the measures relatively modest extensions to existing initiatives.
Jack Simmons, Director of Residential Development and Investment at Jones Lang LaSalle comments:“The announcement that the extension of the stamp duty holiday, until the end of the year, is welcomed as it will assist buyers to obtain greater deposits. However, it is unlikely to make a huge overall difference to buyers, as it hasn’t since it was first introduced, and buyers are still struggling to obtain mortgages at affordable prices and at favourable loan to values." Jack Simmons continued: “The £500 million injection into stalled housing projects is positive; however it will be interesting to see which specific schemes receive this funding and how much real added value it provides. The £100m support for Local Authorities to build sustainable homes is somewhat curious considering housing associations took over the role of housing provider from Councils some 20 years ago. It remains to be seen how Council’s implement these build programmes.
"The announced Mortgage Guarantee scheme could prove a vital tool to ensuring mortgage availability returns to relatively normal levels and this is a measure we have expected for some time. We will monitor with interest whether this initiative is sufficiently extensive and attractive to encourage lenders to increase availability of mortgage products at more preferential rates."
Jack Simmons concluded: "On the whole, the Chancellor’s announcement of a £1bn package designed to assist the housing market and support new house building is welcomed. However the detail of the package will need to be scrutinised further."