'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 for first time buyers, who need more encouragement to climb onto the property ladder which will get everything moving,' said Peter Bolton King, chief executive of the National Association of Estate Agents.
The extension of £175,000 Stamp Duty Land Tax threshold to the end of the year is not enough, according to many in the industry. 'Merely extending the stamp duty threshold is disappointing. Mr Darling had a real opportunity to get rid of this hated tax, which is seen by many as a tax on aspiration. Since the threshold was introduced last autumn it has helped just one third of first time buyers,' said Bolton King of the NAEA.
'If the Chancellor wants to help the housing market, and particularly first-time buyers, he needs to look at how Stamp Duty is paid in broader terms. It is currently a huge barrier to market entry for first time buyers who, especially in London and the South East, have to find huge sums for this as well as their deposit. It is a pity that the budget didn't announce a stamp duty amnesty for all first time buyers or, more radical still, look at charging vendors rather than purchasers to eliminate the market entry problem,' said Yolande Barnes of international property advisors Savills.
Many also called for more details about the Homeowner Mortgage Support Scheme, especially about major lenders that have not signed up but have promised to set up similar schemes of their own.
The measures need to be more radical to have any effect, according to Savills as it has neither addressed the underlying structural problems of the market nor some of the new challenges it faces in future.
Development funding, addressing the non-viability of development, levelling the playing field for investors, counteracting the lack of mortgage finance and barriers to market entry will remain big issues that will affect both the industry and consumers beyond this budget, the company said.
Liam Bailey, head of residential research, Knight Frank, said that the measures are quite small when set against the sheer scale of the property crisis. 'Their effect in stimulating activity, whether in terms of sales or in building more homes, is likely to be relatively limited,' he said.
'Despite the announcements, prices, sales volumes and construction levels are likely to remain weak for the immediate future. A permanent extension to stamp duty would be far more significant in helping sustain the eventual market recovery, he added.
He also warned that the Homeowner Mortgage Support Scheme, which will allow certain qualifying groups access to a scheme which will defer part of their mortgage repayments for two years, will only cover a maximum of 40,000 properties whereas the total of households expected to be at risk of repossession this year totals 750,000.
The Association of Residential Letting Agents described the Budget as 'wholly unsatisfactory' for having failed to improve rental housing stock for a growing number of tenants. 'Alistair Darling had a clear opportunity to improve the bottom end of the rental market and chose to maintain the status quo for Britain's worse off tenants. Yet again Gordon Brown's administration has wasted an opportunity to improve the quality of stock of lettings property by failing to incentivise landlords through tax relief on labour and materials,' said Ian Potter, operations manager of ARLA.
'Not only would this have helped to stimulate the market, particularly in the construction sector, but it would also have provided the greater standards of rented accommodation that this country desperately needs,' he added.
Peter Cosmetatos, director for finance and investment at the British Property Federation, said: 'This was a very disappointing Budget for the property industry. This Government, which has been willing to throw countless billions at a pointless cut in the VAT rate and at the financial sector, has refused to listen to a small number of sensible, targeted industry representations which would have entailed little (and in some cases no) cost to the Exchequer and which would have given valuable support to businesses in the current environment.'
