In addition, regulations required to convert disused commercial property into residential homes, are also being relaxed to further assist developers.
Here is what the industry has to say about the Budget changes:
Ian Fletcher, director of policy at the British Property Federation, said: "This package broadly makes sense, because it targets home deposits, and is about as much as the Government could realistically do in current circumstances. It is important that any Government spending at this juncture is also supporting growth and jobs and we would like to have a seen a refined policy which targets such aid at homes yet to built or completed, rather than a means of house builders selling unsold stock."
Peter Williams, Executive Director of The Intermediary Mortgage Lenders Association, said: "Any move to help first-time buyers onto the property ladder must be applauded as this is a sector that has been particularly badly affected by the credit crunch and subsequent mortgage drought.
"However, the Government must see First Buy as one of a number of mechanisms to help the mortgage and housing market because it will have little impact in isolation. George Osborne estimates that this scheme will help approximately 10,000 borrowers, but that would only equate to a 5% rise in the number of loans to first-time buyers compared with 2010 numbers.
"We would like to see this scheme used hand-in-hand with other initiatives, such as a review of the Stamp Duty threshold. First-time buyers already benefit from 0% Stamp Duty on properties up to a value of £250,000, but the threshold for house movers should also be reviewed to encourage greater activity in this segment of the market.
"We would also like the Government to properly address the funding issue in the mortgage market. Although the Government has recognised the importance of the wholesale funding sector to the availability of mortgage finance, we have seen little in the way of support for this market. IMLA believes the Government can play an important role in supporting the securitisation markets, which will ultimately result in wider availability of mortgages across the board."
RICS chief economist Simon Rubinsohn said: "Access to equity loans could help many people who thought they were locked out of home ownership take their first step on the housing ladder.
"Opening up the housing market to first time buyers will be essential to help support economic growth. This is a key area as the lack of mortgage lending has significantly reduced the number of homes being bought and sold which in turn has led to low housing housebuilding levels. Although it would not be a solution to all housing problems this could represent the first step towards a vibrant and sustainable property market and assist the economy recovery."
On changes to SDLT and REITs, Rubinsohn said: "RICS is pleased that the Chancellor has listened to our calls to make changes to stamp duty and Real Estate Investment Trusts (REITs) in order to support investment in house building. As an organisation we have been calling for these changes for several years and have worked closely with the Treasury and other industry bodies to help support this new approach to rented housing. The bulk purchase rule change is particularly welcome as it will mean that stamp duty is charged on an average price per unit rather than the total transaction cost.
"More people are now choosing to rent their home, particularly young professionals and those who are looking for flexible accommodation. Changes to REITs and stamp duty will help encourage large investors including pension funds into the sector providing a revolution in how rented homes are supplied. Changes to these systems will lead to more high quality properties which are a genuine alternative to owning a home.
"The most recent RICS lettings market survey showed that rents are continuing to rise as there are a lack of homes available for rent. Increased investment as a result of changes to stamp duty and REITs will help increase the range and affordability of rental properties."
While on use class changes, he said: "RICS welcomes steps to tackle under use of buildings but the wider impact on the commercial property market also needs to be considered. As the economy grows there will be a need for additional accommodation for expanding and new businesses and too many conversions to residential property could mean that appropriate space is not available. Short sighted changes could lead to a lack of commercial property, delaying the recovery.
"This situation could be made worse by the Government’s continued imposition of empty property rates which are significant barrier to speculative commercial property development."
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