The government’s new package of measures to kickstart the housing market is unlikely to be enough to make a real difference across the sector, traders have voiced.
Removing stamp duty on property sales up to £175,000, interest-free mortgages for certain first-time buyers for the first five years and bringing forward affordable housing plans form part of the government’s answer to the dramatic housing slowdown.
The measures come as Nationwide’s chief executive predicts a 25% fall in house prices from their peak and Redrow and Barratt become the latest major housebuilders to announce steep profit declines.
Steve Osborne, Covers managing director, said he was pleased the gov-ernment had stepped in as any action to generate positive movement within the housing market was welcome.
“However, I fear that expectation over house price movement will have more affect on this, in the short term, than any measures the government can take. Covers, being a southern-based merchant, will also receive less benefit from the increase in stamp duty thresh-old to £175k than other geographic areas as only 25% of housing stock in our area falls below this threshold.”
Martin Lee, Buildbase commercial director, said the trade needed some help, as in 40 years he had never known such poor business conditions.
“But I think the credit situation has to get sorted first. Until there is money back in the system I do not think we’ll see an end to these brutal trading conditions.”
“We have to welcome any govern-ment initiative aimed at helping the housing market,” added Alastair Kerr, director-general of the Wood Panel In-dustries Federation. “But is it enough to stimulate the housing market is another question. Generally, it’s welcome but almost certainly it’s not going to be enough.”
Philip Brading, chairman of panels specialist Neat Concepts Ltd, said the measures would not help materially because the money involved was too small given the size of the market overall.
“I think the government needs a more radical approach,” he said.
But he noted that Neat Concept’s US commercial business had held up well despite the far steeper housbuilding decline in America, giving him hope for the UK shopfitting sector.
Richard Lambert, chief executive of the British Woodworking Federation, said the measures would have positive repercussions for the entire construction industry if they came through quickly enough.
“What we’re seeing from our members is pressure coming from the new-build market, with those locked into it finding it hardest. If [the plan] comes through and comes through quickly enough, it will help ease the pressure.”
