How Budget aims to rescue housing market

Council of Mortgage Lenders (CML) director general Michael Coogan said: "The most important element of this Budget for the mortgage market over the long term may prove to be the new asset-backed securities guarantee scheme. This potentially offers an opportunity to restart the capital market funding for mortgages that will be a crucial factor in delivering an adequate supply of mortgage credit.

"Although today’s Budget measures will have little short-term impact on the housing and mortgage markets, they do at least remove some of the uncertainties associated with the potential impact of withdrawing stamp duty and ISMI concessions too early, and provide some relief to support the new-build housing market.

"The Chancellor had little room to make substantive interventions, so there are no real surprises in this list. The measures overall are unlikely to significantly improve prospects for higher market activity in the coming months."

Adrian Coles, Director-General of the Building Societies Association (BSA), said: "The extension of the Stamp Duty holiday for properties costing less than £175,000 could benefit a number of first-time buyers, but should not be expected to boost the housing market substantially.

“The BSA urges the Government to take this a step further by researching how the Stamp Duty system could be reformed to reduce the distortions from the current ‘slab’ structure of the tax that results in the bunching of transactions at prices just below the thresholds for different rates."

Meanwhile, homeless charity Shelter was more welcoming. Chief Executive Adam Sampson said: "Housing is at the heart of the recession with millions of people suffering through threat of repossession, lack of affordable housing and homelessness.

"A £1billion package is a welcome recognition that housing has to be a top priority for Government now and for the next decade."

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