Housing in the budget


1.119 The affordable supply of new homes in the right places helps to create a dynamic economy and a flexible labour force. Housing supply is constrained by the lack of viable land for development. As set out above, the Government is announcing reforms to the planning system which will increase the amount of land brought forward and improve incentives for local communities to support development.

1.120 Over the long term, increased macroeconomic and financial stability will create a favourable environment for house-building. Stability in the labour market and the availability of mortgage finance will support sustainable demand for housing. The associated increase in certainty for the construction sector will aid the supply of new homes.

1.121 The Budget provides help for homeowners and new buyers, and supports the capacity of the house-building industry to ensure a more efficient housing market:

* The Government will help homeowners facing difficulties by extending for a further year temporary changes to the Support for Mortgage Interest (SMI) scheme. The 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013;
* the Government will provide £250 million to support first time buyers to purchase a new-build property. The FirstBuy programme will assist over 10,000 households with equity investments jointly funded with house-builders; and
* the Government will strengthen demand for residential property by reforming the stamp duty land tax rules applied to bulk purchases. This will reduce a barrier to investment in residential property, promoting private rented housing supply.

1.122 The Government will announce the outcome of its review of the stamp duty land tax relief for first time buyers in autumn 2011.

1.123 The Government will make Real Estate Investment Trusts easier to set up and more accessible to investors. This will encourage investment in the private rented sector over the longer term.

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