Mortgage experts have dismissed the Budget's housing proposals as 'largely ineffectual' and say the Government should have gone further to boost the market, especially on stamp duty.
Alistair Darling confirmed the current stamp duty holiday will be extended until the end of the year. All properties purchased for less than £175,000 will be exempt, a policy that the Chancellor claimed will benefit 60% of housing transactions.
He pledged to continue to back the Government's Mortgage Support scheme to help borrowers stay in their homes if they fall on hard times. The Government's shared equity scheme, HomeBuy Direct, will also be given a further £80m of funding.
However, while providers such as Abbey welcomed the extension in the stamp duty holiday, they were disappointed the Government had not gone further with its proposals.
Nici Audhlam-Gardiner, director of mortgages at Abbey, says: "The Government should be doing more to help first-time buyers - ideally through a permanent increase to the nil rate threshold - or at the very least, by making stamp duty incremental, so it works like income tax.
"The current slab taxation system is unfair as it means that if a person falls into a higher threshold, even by just a few pounds, they pay the higher rate on the whole amount."
The Royal Institution of Chartered Surveyors (RICS) also called for a tiered version of Stamp Duty, but welcomed the extra funding for HomeBuy Direct.
The National Association of Estate Agents was dismissive of the overall Budget proposals, stating Darling had 'used a water pistol to put out a fire'.
Peter Bolton King, chief executive of the NAEA, says: "The housing market is the engine of the UK economy and it is likely that this Budget will be remembered as largely ineffectual given the magnitude of the problem. There is very little here for first-time buyers, who need more encouragement to climb onto the property ladder - which will get everything moving."
Robin King, director of Movewithus and Whitehot Property, adds: "The Budget is good news for housing, but it should have gone further. The extension of the Stamp Duty holiday for properties up to £175k is good news, especially for first time buyers. Likewise the £500m support for building projects will help.
"However, these measures alone will not kick-start the housing market. Rising repossessions and unemployment uncertainty will play a larger part in dampening the growth, at least for the next 12 months. The good news is that first-time buyers will benefit, so long as lenders provide them with mortgages."
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