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News Release

London

Jones Lang LaSalle comments on key announcements made in the 2011 Budget statement by the Chancellor of the Exchequer, the Rt Hon George Osborne MP

FirstBuy Programme Is a Welcome but Modest Measure for UK Housing Market


The Chancellor of the Exchequer announced today in the 2011 Budget the provision of £250 million to support 10,000 first time buyers purchase new-build properties. Those with a household income of less than £60,000 a year and who can put down a 5 percent deposit on a new home will be eligible for The FirstBuy scheme, which will see the government and new home builder each providing up to 10 percent through an equity loan, enabling first time buyers to qualify for 75 percent loan-to-value mortgages.
 
Rob Bruce, Head of Residential Research at Jones Lang LaSalle, said: “This scheme will provide a stimulus to the lower end of the market at a time when first time buyers are struggling to raise deposit monies. It will also lend support to the new build housing sector which has suffered over the past few years. There is a growing pressure on the private rented sector as buyers face difficulties accessing the mortgage market and this measure will help offset that strain.”
 
“However, despite the positive benefits this scheme will give the UK’s housing market, it is a modest measure.10,000 first time buyers are just a fraction of those looking to get onto the property ladder and represent merely 1.1% of the total number of housing transactions across the UK during 2010. With almost 200,000 loans granted to first time buyers in 2010 the select few had better be quick off the mark. Growing unemployment is still a concern and with anticipated interest rate rises this year the housing market will continue to come up against obstacles. The residential sector needs more significant support to make sure first time buyers can access the property market, but also ensure a stable recovery as we emerge from the financial crisis.”
 
Rate relief for small businesses
Mark Radford, Director, Jones Lang LaSalle’s Rating team, says: “The Chancellor has announced today that businesses occupying properties with a rateable value of less than £6,000 will continue to receive a 100% rates holiday with a sliding scale up to RV £12,000. We welcome this move to help small businesses, indeed this is a scheme which has worked very well. It is disappointing however that the Chancellor hasn't seized the opportunity to reduce the empty rate burden for owners of larger properties."
 
Regional markets
Peter Lees, Head of Jones Lang LaSalle's Manchester office, says: "We welcome the news of the Government’s commitment to the continued future of the North West economy with initiatives such as the new Enterprise Zones and the significant investment in road and rail network infrastructures to improve connectivity between major business hubs both in the region and nationally. Although the detail behind the Enterprise Zone plans will need to be reviewed closely once released, the forecast fiscal measures and planning strategies will be a welcome boost to our local markets."
 
Jeff Pearey, head of the Leeds office of Jones Lang LaSalle’s Leeds office, says: “The Chancellor’s announcement, that there will be a new presumption in favour of development so that the default answer is "yes”, has to be good news for the development community.   The regional commercial property market remains challenging - we need as few barriers to innovative development as possible.  The planning process has long been regarded as time consuming and expensive; hopefully this stimulus, together with other measures aimed at the planning system, will be seen by developers investing in our region as changes for the positive.”