Budget 2011: First Buy scheme ‘extremely welcome’ for property industry

AN INCENTIVE scheme for first-time buyers and wholesale reform of the planning system were pledged by George Osborne in his 2011 Budget Speech.

The Chancellor wants to use the £250m proceeds from this year’s bank levy to launch a ‘First Buy’ shared-equity scheme, to help around 10,000 first-time buyers wanting to purchase a newly built home get on the property ladder.

In addition, Mr Osborne said he would tackle a planning system which he claimed was costing councils 13% more in real terms than it was five years ago.

He said all bodies involved in planning would be expected to prioritise growth and there would be a presumption in favour of sustainable development. The West Midlands property industry has been giving its reaction.

Simon Dicken, associate director in Jones Lang LaSalle’s residential team, said: “This scheme will provide a stimulus to the lower end of the market at a time when first time buyers are struggling to raise deposit monies.

“Despite the positive benefits this scheme will give the UK’s housing market, it is a modest measure. 10,000 first time buyers represents just a fraction of those looking to get onto the property ladder.”

Jon Neale, residential research partner at consultancy King Sturge, said: “The announcement of First Buy Direct, effectively a continuation of the previous Government’s HomeBuy Direct scheme, is extremely welcome to both first-time buyers and housebuilders alike.

“With most mortgage providers requiring a deposit of at least 15 to 20%, equivalent to well over £30,000 in most parts of the country, it is unsurprising that first-time buyers are a vanishing species.

“Most builders of new homes are disproportionately dependent on first-time buyers and this will help stimulate the development of much-needed homes.”

Louise Brooke-Smith, managing director of Birmingham-based consultancy Brooke Smith Planning, said: “We are pleased that Mr Osborne has specifically highlighted planning issues as a way to support the construction and development sectors.

“We await the fine detail but it will be interesting to see how local authorities react to the potential loss of Section 106 contributions and hence lose out on affordable provision, commuted sums for public open space, education contributions and so on.”

Nick Payne, managing director of development group Nikal, said: “The low-interest loan to first time buyers will give the property market a much needed shot in the arm this year.

“This new loan will provide a boost to jobs in construction and its associated industries, support the supply of new homes and help purchasers secure their first home despite our depressed housing market.”