BLOG : A victory for gentle persuasion

31 Mar 2010

 

A veteran industry commentator contacted me last week to condemn the industry's welcome for the Budget measures as "fatuous".

I was a bit taken aback to be honest. The industry - through the likes of the HBF and the Barratt boss Mark Clare - had indeed welcomed the measures, with HBF describing them as a "huge boost". To me, this is no exaggeration.

The government in the Budget showed that it had listened to the pleas of the industry and recognised housing's importance to society and the economy. It announced a series of measures to try to help the industry deliver. These include the raising of the stamp duty zero rating threshold to £250,000 for first time buyers; action to ensure that local authorities maintain a five year supply of land; and measures to ease the burden of regulation on the industry.

To have these initiatives included in the Budget is a significant success for the industry.

What the chancellor did, particularly with his stamp duty measure, was to send a message that the housing market is important and that it is willing to act to help it grow again. This in itself increases confidence, helps housebuilders and estate agents sell, and gives a welcome boost to a market that is making, in the chancellor's own words, a "slow recovery".

At the same time the actions on land and regulation at least suggest an understanding of the systemic problems facing the new homes industry.

It is easy to criticise. It is easy to stand on the sidelines and say that these measures won't work, that not enough is being done. But there has to be some sense of realism about what is achievable. Stamp duty is an important tax for the Treasury - at a time of fiscal crisis, to get any reduction is a victory. And regulation might be a burden for housebuilders - but not many disagree that we have to strive to reduce carbon and make homes accessible for all. The government is not about to abandon these aims.

Two years ago, as the crisis bit deep, we waited in vain for help from the 2008 Budget. The government seemed unaware of the housing crisis and the importance of housing.

Two years on, the situation is somewhat different, as the government has listened and is acting to help the industry. This has been achieved by sensible discussion and debate, not criticism from afar. The measures taken by the government will help, but no-one expects them to be a panacea. But what these measures do is provide a framework and an opportunity for housebuilders to continue on their path to recovery.

Comments

Comments: 2


The problem is that gentle persuasion is not enough. Their was nothing in this budget to help bring housebuilding out of the doldrums. This applies to social as well as private. I did not see any substantial help to potential homebuyers, for instance the government could help to be a guarantor for the deposits now required by their own banks. Indeed they could have gone further and guarantee mortgage availability for first time buyers that meet lending criteria, But like the HBF they are just siting on their hands. The HBF have obviously decided to wait for a change of goverment before lobbying, but I think they have missed the boat on this. I can see no support in any party manifesto beyond cutting home purchase tax.

As your claim that the industry supports reduction in carbon, this needs a caveat. There are many governmennt sponsored quangoes who are paid to lobby and promote burdening new homes with extra costs when both the industry, and more importantly the homebuying public can avoid it the least. The new change to the building regulations could indeed be the final nail in the first time buyer coffin.

Steve Nicholls

BSc(Hons)Residential Development
steve nicholls
on 25 Apr 2010
at 12:59
Why not just re-name the blog the Brown-Darling Fanzine? The stamp duty cut was a vote buyer, nothing more. £350m to buy a 4th term. The simple truth is that Brown as Chancellor allowed the housing market to overheat and now homes are too expensive. Cutting stamp is just fiddling while Rome burns - the ugly truth is that prices are just too high and rather than try to beat the banks into lending more or making things a bit easier for buyers, homes need to be within reach for unassisted, ordinary buyers. No more 80%parental support, no more shared equity, no more HomeBuy Direct and no more sacrificing First Time Buyers to the god of house price inflation. And just for the record, I am not a wannabe buyer or anything like that and have no personal interest whatever in what happens to house prices.
Robin Hardy
on 31 Mar 2010
at 14:21

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