A Budget that reduced the cost of a pint of beer by a penny was greeted with muted cheer by the property industry as the Chancellor gambled £130bn on house building, kick starting the economy.
Amid the unremitting gloom of revised growth forecasts and higher than expected borrowing figures, George Osborne nailed his colours to the house building mast by offering a £130bn loan guarantee to aspiring home-owners struggling to get a mortgage, and an interest free loan worth 20 per cent of the value of a new build house, in a move the Chancellor declared “a good use of the Government’s fiscal responsibility”.
There was also encouragement for the emerging ‘build-to-rent’ sector as the oversubscribed equity funding was increased fivefold to £1bn, and will provide equity or loan finance to support development stage finance.
Liz Peace, chief executive of the British Property Federation, said: “Overall there’s more good than bad for the property industry in this Budget, and the Chancellor appears to have avoided last year’s mistake of announcing half baked policies, like the 15 per cent stamp duty rate.
“For too long time the size of deposit needed to get on the housing ladder has proved prohibitive and has been the missing piece in a coherent housing strategy, it’s good to see the Government move to remedy this. Time will tell whether this policy will prove effective, but taken with the fivefold expansion in the ‘build-to-rent’ fund the Government is certainly tackling the problem head on.”
The Government also confirmed it would consult on allowing the change of use from retail use to residential without the need for planning permission in a bid to breathe life into the nation’s high streets.
Peace added: “Retail to residential conversions could be an important step in breathing life into our high streets, and we would very much encourage a flexible approach, particularly in areas with increasingly obsolescent retail stock that is unlikely to be brought back into retail use.”
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