Chancellor of the Exchequer Alistair Darling while delivering his maiden budget speech stated that the Government would consult with industry on fixed rate mortgages for 10 years, 20 years or 25 years period. However, more details are required on the plans, after his last month commitment of grading the mortgage system by giving ‘gold standard’ kite mark to least risky loans. He stated that the support of the Government for shared equity schemes have helped 95,000 homeowners across the country, to acquire their property, especially after Labour took office. He also announced that the stamp duty will be scrapped to 80 percent of the equity value and 8 billion stg would be spent for social housing over the next three years.

The chancellor said that these measures would help to boost the secondary markets which were now facing a difficult situation and also would keep mortgages stable and low. He also promised more support through the cutback of stamp duty on shared equity schemes for the first-time home buyers and key workers. He also added that in the existing weak market, this measure is expected to diminish tax revenues and encourage house buying activity.

Further, land remediation relief has been extended in the Budget to help the brownfield land development. He stated that for supporting existing land redevelopment, new measures are adopted to deliver 200,000 homes by 2016 on the additional land owned by public sector and this will result in increase of supply in housing without using the green field sites. Conversely, the market observers stated that with the identification of more public land sites, the Government’s plan cannot be expanded further as the land availability becomes limited.

On the other hand, the Council of Mortgage Lenders (CML) said that the budget measures may be beneficial for the mortgage and housing market in the long term; however this will not bring relief to the immediate problems faced by the people. But, CML welcomed the move by the Government to help the secondary market and non-commitment of ‘gold standard’ kitemark for mortgage backed securities and covered bonds.

Council of Mortgage Lenders condemned that there is no fixed timescale on providing relief measures and hence this will stiffen up requirements on sale and leaseback schemes. It also said that there was little immediate help for the mortgage or housing market through this budget. It also said that the new announcements on scrapping stamp duty to 80 pct of the equity value on the shared equity schemes would not provide any short-term relief to the first-time buyers as the entry costs will remain the same and hence the buyers may not find them affordable. CML also stated that only a stamp duty reprieve can bring immediate relief to the first-time buyers as this will reduce the entry costs.

New Homes Marketing Board Chairman David Pretty reacting on the budget told that these measures would benefit only a limited number of homebuyers while the raise in stamp duty would affect everyone.