photo credit: djprybyl
A mixed response has greeted a raft of measures announced by the UK government designed in part to help the UK real estate market.
Chancellor Alistair Darling unveiled his pre-budget report earlier this week, which included a £20 billion financial injection for the economy.
Value added tax (VAT) has been slashed from 17.5 per cent to 15 per cent from Monday and a 45 per cent income tax rate is to be imposed on some high earners.
Conservative critics of the plan said the government was taking too much of a risk with public money.
The Home Builders Federation (HBF), which represents some of the UK’s biggest developers, said the plans did not go far enough towards helping the housing market.
The HBF said:
“The government has failed to heed the industry’s call for a significant increase in investment to help bring forward much needed new housing delivery.”
However, the group also welcomed a commitment by the chancellor to increase mortgage lending by the UK’s big banks.
The Royal Institution of Chartered Surveyors (RICS) said:
“We are pleased that the government has accepted our calls for a tax relieved savings scheme to help first time buyers save for a deposit.”
The group also commented on a planned support package for the mortgage market including providing guarantees on the interest and principal of residential mortgage-backed securities.
RICS added:
“Ultimately, this move should increase funding available for new borrowers which, in turn, could inject some much-needed activity back into the housing markets.”
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