May 2009

'A WATER PISTOL TO PUT OUT A FIRE'

ALISTAIR DARLING's Budget has been slammed by the National Association of Estate Agents as “largely inneffectual” and an instance of the Chancellor of the Exchequer using “a water pistol to try to put out a fire”.

The NAEA had made a five-point plea to Mr Darling in advance of the Budget, calling on him to help pull the housing market out of its slump.

Among measures announced by Mr Darling were a scheme to guarantee mortgage-backed securities to boost lending, along with an extra £80 million for a shared equity mortgage scheme.

But the only result of the NAEA’s calls for Stamp Duty to be abolished or reformed and Home Information Packs to be scrapped was for the Stamp Duty ‘holiday’ on properties up to £175,000 to be extended by three months to the end of this year.

NAEA chief executive Peter Bolton King said: “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 was very little in it for first time buyers, who need more encouragement to climb onto the property ladder – which will get everything moving.

“Mr Darling has used a water pistol to try to put out a fire.

“Merely extending the Stamp Duty threshold is disappointing. He has tried to choose a path to please everyone, which I suspect will please no one.”

On the package of Government guarantees on new mortgage-backed assets, Mr Bolton King said: “We called on the Government to do more to boost liquidity in the market and we welcome this measure. I would just call on the Government to monitor carefully that this measure has gone far enough and step in if it hasn’t.”

Paul Smith, chief executive of the estate agency chain Spicerhaart and a regular EAN columnist, said that the Budget had “missed the target by a long shot” and agreed with Mr Bolton King that first-time buyers need a better deal.

“If the Government wants to reinvigorate the UK property market it should invest heavily in first time buyers as they are the lifeblood of the industry and the wider economy,” said Mr Smith.

Michael Coogan, director general of the Council of Mortgage Lenders, said the Budget measures "will have little short-term impact on the housing and mortgage markets".