The chancellor’s scrapping of stamp duty for first-time buyers purchasing homes below £250,000 has been welcomed by key construction groups.
The Federation of Master Builders (FMB), Construction Products Association (CPA) and NHBC said the move in today’s budget would help boost the housing market, although the FMB said the chancellor had failed to address the acute shortage of mortgage finance.
“Helping first-time buyers get on the property ladder is an important step but most people will still struggle to get the funding they need to secure a mortgage despite the Chancellor’s promise of further lending from state-owned banks,” said FMB director-general Richard Diment.
The FMB and CPA were disappointed at the lack of VAT rationalisation on energy-efficiency measures, with CPA chief executive Michael Ankers singling out the lack of help for households to improve the energy-efficiency of their homes.
“The package of measures announced today will help the market and the industry, but nobody should underestimate the challenge in providing the nation with the number of new homes it requires” added NHBC chief executive Imtiaz Farookhi,.
Other key points from a budget which did not give much detail on spending cuts needed to cut the public deficit, include a phased rise in the 3p fuel duty increase, with 1p hikes in April, October and next January, instead of a 3p rise next month.
Small businesses will receive a £2.5bn package to boost skills and innovation, and a 12-month business rate cut will be implemented in October to help 500,000 firms. Investment allowances for small firms will be doubled to £100,000, with no change to capital gains tax, VAT or income tax.
A £2bn investment “green investment bank” to back low-carbon industries will be formed, while government savings are to include relocating 15,000 civil servants outside London.
Borrowing this year is forecast to be £167bn – £11bn lower than predicted in December, and falling to £74bn by 2014-15. Growth is forecast to be 1-1.2% this year and 3-3.5% in 2011.
