Home.co.uk
Home.co.uk

News: Housing tops pre-budget agenda

Wed, 10 Oct 07

Chancellor Alistair Darling’s  pre-budget speech has focused on a number of key areas for housing...

Long term measures have been outlined in this year’s report to deal with issues such as planning reform and new homes. However, the government needs to be aware that these will not solve some of the more immediate problems facing consumers and the housing market today, says the National Association of Estate Agents (NAEA).

Peter Bolton King, Chief Executive at the NAEA, comments below on the Chancellor’s announcements.

Planning reform and new homes

The Chancellor reaffirmed the government’s wish to bring about reforms to the UK’s planning system and build an extra 3 million new homes between now and 2020. The NAEA warns that while these are valuable as long term solutions, they cannot be expected to solve the immediate problems being faced by the market and consumers.

Mr Bolton King commented: “We are of course very supportive of planning system reform and the construction of more homes in the UK. The government needs to consider that it is not just a numbers game however – it’s about having the right homes in the right places. It is also a long term measure. It will take an extremely long time for the effect of the government’s planned new homes to be felt and for the supply and demand balance to be restored.”

Inheritance tax


In his speech today Alistair Darling announced he would be immediately raising the combined inheritance tax threshold for couples from £300,000 to £600,000, to reach £700,000 by 2010.

Mr Bolton King observed: “These plans are certainly welcome. We have been calling for inheritance thresholds to be re-evaluated for a long time now and are pleased that both the government and the opposition have recently recognised this important issue. Too many homeowners have had to live with the knowledge that a substantial portion of their assets will not go to their family when they pass away. The latest move will at least release a significant number of people from this burden.”

Mortgages

Mortgages were on the agenda as the Chancellor expressed a wish to help lenders offer more fixed rate deals to home buyers and to have them run over longer terms.

Mr Bolton King added: “This will be welcome news for homebuyers, particularly at a time when recent interest rate rises have had a serious effect on consumers’ monthly expenditure. Extended fixed rate deals certainly make sense – it has always seemed strange that the UK has been so reticent about fixed rate mortgages when countries such as Japan and the USA embraced them a long time ago.”

Stamp duty

Stamp duty on residential property transactions was one topic not raised by the Chancellor in his speech today.

Mr Bolton King continued: “The issue of stamp duty was conspicuous in its absence today – particularly following statements made by the Conservatives recently on the subject.

“Stamp duty is an area we are continually urging the government to address. The minimum threshold has been raised in recent years, but not nearly enough to keep up with inflation. The government is sitting on a simple solution here for first time buyers – that of scrapping the tax altogether – but as yet has not taken steps to put this straightforward measure into practice.”

A balance of short and long term solutions needed

Mr Bolton King concluded: “We continue to support the government’s long term aims of creating and freeing up more housing, increasing homeownership through shared ownership schemes and reforming the UK’s archaic planning system. We would, however, urge the government to consider what it will do in the short term to address issues such as the plight of first time buyers and the current low confidence in the market, since many of the measures being suggested today will take a long time to bear fruit.”

Back to: News Index