Todays budget has failed to provide the housing Market with the cardiac massage it so desperately needs.
Reinvesting £1bn of the £2.5bn stamp duty taken from house sales last year alone is like a fly on a windscreen. House prices are falling at rates you almost need an altimeter to read and Alistair Darlings’ solution is to put out a pocket handkerchief to catch us in!
Elements of this budget will help when viewed in conjunction with other efforts already announced but those who had hoped that the Government appreciated the significance of home ownership, it’s ability to provide funding for small businesses or the increased deposit that first time buyers now require from the bank of mum & dad will have been hugely disappointed.
In a performance worthy of a Bird & Fortune sketch, the Chancellor has illustrated how impotent the Government is in the face of the economic downturn. The failure to recognise the housing Market as the boiler house of the wider consumer economy comes as no surprise to the hundreds of thousands of homeowners now stuck with property that isn’t selling and with little knowledge of what they are worth.
Home ownership, so long the aspiration encouraged by the state has become a mirage to many of the next generation who are typically being asked to gamble first with their finances for their own further education and then with their home.
HMS (home mortgage support scheme) announced ahead of the budget appears to be yet another attempt by central Government to paper over the cracks in the housing Market. .
It has arrived five months after it was first mooted during which time nearly 30,000 people have had their home repossessed.
To qualify, you must first re-mortgage and get an interest only mortgage which the HMS MAY then help with up to 70% of the cost of – for up to two years.
It looks like the modern equivalent of rearranging deck chairs on the Titanic! Frantic calls to CLG yesterday has at least clarified that equity in your home won’t count as a apart of the £16k maximum savings you can have to qualify but with 75,000 homes expected to be repossessed this year, those under financial pressure had been expecting something different from the slogan “every little helps”!
It seems to me that the Government are prepared to throw billions at banks, car makers and their own perks but homeowners in the UK will have to wait until a general election before they get a chance to elect someone who might want to take homeowners seriously.