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Pre-Budget: what it means for housing
The centrepiece of the Pre-Budget Report was a cut in VAT from 17.5 per cent to 15 per cent, which the Government hopes will encourage people to spend.
The cut is a temporary measure from 1st December 2008 until 31st December 2009 as part of the Government's battle to boost the market.
Alistair Darling also announced a £1.8 billion package for housing. £775 million would be used to invest in regeneration and new homes and it will also help buyers secure new mortgages and help those who have lost their jobs with mortgages.
The Government is set to bring forward £3 billion of public sector projects, such as motorways, new social housing, primary schools and energy efficiency.
But, the pre-budget report is unlikely to have much impact for property owners and the real estate market, some experts have claimed.
According to analysts Jones Lang LaSalle, it gives only a little more room to fund mortgage repayments and help stave-off further repossessions and arrears.
The three month grace period being granted to homeowners facing repossession, for example, will be of comfort for such homeowners and will also benefit the wider marketplace, they said, but this will only have a modest impact overall.
Empty property rates have been cut for properties with an estimated value of less than £250,000 - which Mr Darling says represent around 70 per cent of empty commercial buildings in the UK.
Revealed today in the pre-Budget report, the change will take effect from the financial year of 2009/10 - April next year and at the moment is only temporary. The exemption will apply for properties with a rateable value of less than £15,000.
But the British Property Federation has said that the change is not as comprehensive as hoped for by the industry.
£15,000 rateable value equates roughly to £20,000 annual rental value, according to rating experts - which means the exemption only applies for properties worth less than around £250,000 at most.
Housing minister Margaret Beckett said, "We are determined to do everything possible to provide real help now to homeowners facing tough times.”
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