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Talk is cheap. We need action George Osborne

by: Jon Round
  • 19/03/2013
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Talk is cheap. We need action George Osborne
With the Budget approaching, the Chancellor is facing an interesting situation.

Having missed many of the goals that he set himself and with the country’s loss of its AAA rating he may well be restricted in what he can do while sticking to his party’s chosen course of austerity.

While housing is obviously an issue that we would all like to see addressed on a number of fronts, it is unlikely to be the largest priority that the Chancellor has to deal with in this Budget.

What it would be good to see is some new actions, and some that don’t just rearrange the deckchairs. Talk is cheap and it’s is easy to announce new things but the Autumn Statement showed us that very little of it is new.

What we need is something new that really makes a difference, not a measure that replaces an existing one. The Funding for Lending Scheme has, so far, just replaced other sources of funding.

NewBuy and First Buy have replaced other new build incentives, yet house building and new lending figures have not actually increased by very much.

In fact it will be interesting to see what changes, if any, are made to the FLS scheme and whether any incentives or constraints will be put on the money to encourage banks to lend at higher LTVs and increase their lending to businesses – both of which we really need to see.

Rumours of an extension to the scheme into the middle of next year illustrate that the government thinks the scheme is working even if the initial figures have not terribly promising, but what we need are measures that will make it effective, that encourage lending in the areas that need it the most.

Finally, no doubt within the industry there will be the usual calls for Stamp Duty to be reduced or made fairer, but with the UK deficit getting larger rather than smaller and talks of a switch to tax rises rather than more spending cuts, reform of Stamp Duty is more unlikely than ever this year.

Jon Round is financial services director at LSL Property Services Group

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