In 3 days time George Osborne will deliver a 2011 budget speech but I doubt there will be much in it for the Housing Market.
New build starts are down 41% over the last three months compared to the same quarter last year according to Glenigan the construction researcher. New private housing starts are down due to a continued pessimism about the markets health, poor household income prospects and limited mortgage availability plus bad weather.
Social housing projects are also significantly down as a result of cutbacks in finance availability and changes to the support and funding regimes.
Options For the Chancellor
- Tinker with the stamp duty and other tweaks to rules and regulations. (Not part of George’s modus operandi)
- Free some more cash into the lending market. (A possibility as the banks have now repaid over 50% of the bale-out loans made by government during the financial crisis)
- Change the rules on capital gains tax for second homes, houses built in gardens and property transfer on death. ( Not sure if that will help or hinder)
- Vat or NIC tweaks aimed at helping those in the construction and building market.
- Innovation for funding social housing. (Why not use lottery funding post the Olympics.)
- Help for private landlords with tax breaks or other assistance. (Tories rule OK)
- Short term growth stimulous of a sort to be decided. ( Growth is the buzz but how will this manifest itself in the Housing market? We must wait and see)