Sally Laker, Mortgage Intelligence

Gordon Brown defied strike threats as he pledged to press ahead with a cull of 104,000 civil servants, saying he will save £21.5bn in bureaucracy.

The knock-on effect would potentially increase council tax rates by 6.7% (three times the rate of inflation). He also promised 1.1 million new homes across London and the South East by 2016 and an increase in social housing from 20,000 to 30,000 a year over the next three years. This would include council houses, housing association properties and low cost homes for key workers like nurses and teachers.

In my opinion, the Chancellor is missing the point and not offering any immediate help to first-time buyers (FTB). An increase in the threshold for Stamp Duty or tax advantage on buying a first home or as a key worker would actually help key workers now. Also, if spending cuts increase council tax people may think twice before moving up market and this could have a knock-on effect on the housing market.

Bill Warren, The Complete Network

The new funding for housing will have the most impact on the mortgage market as it is so closely linked to the fortunes of the property market.

200,000 new homes built in the south of England by 2016 are bound to have some impact on property prices, which will level out as supply increases. On the other hand, the commitment to a new Community Infrastructure Fund will help to create attractive communities in which desirable properties will hold/increase value.

The main consequences for lenders and brokers will be possible changes in the buy-to-let market. The 50% increase in the construction of social housing promised by 2008 could pull tenants back into the public sector, leaving buy-to-let landlords high and dry. If buy-to-let properties are then put back on the property market in huge numbers, it could collapse at the lower end where rental properties tend to be.

Miles Shipside, Rightmove.co.uk

The UK suffers from long-term structural shortages of housing, particularly at the more affordable end of the market. Brown’s initiative to divert more Government resources towards housing, spending an extra £1.3bn a year by 2007/8, must be welcomed, including special allocations in support of renovation in the North and the Midlands.

The timing, coming a couple of days before two key by-elections in the Midlands, may have a whiff of politics, but so be it.

His initiatives to speed up the planning process are also crucial elements in the campaign to build more houses – an area where this and previous governments have had only limited success so far. In addition, Stamp Duty now catches the vast majority of FTBs in the UK, so a clear way of making housing more affordable is to raise the first £60,000 threshold – the timescales of which could be far quicker than other initiatives he is proposing. Maybe he can add to that a measure to make the burden of Stamp Duty fairer and more evenly spread, so that it no longer creates the massive distortions in the market for which it is responsible today.

Jonathan Cornell, Hamptons International Mortgages

The Chancellor has clearly set out his stall on a massive injection of capital into the public sector. To be able to invest the huge sums he intends to spend, UK taxpayers are going to need to dig further into their pockets.

Brown is gambling that if the UK economy grows as fast as he hopes then we will all be earning more so the additional expenditure can come out of the extra tax we will pay – if not, he will need to borrow this money.

The only direct housing market actions seemed to be the Chancellor promising a 50% rise in social housing by 2008 and a £525m-a-year boost to the neighbourhood renewal fund for urban regeneration, which are both insufficient to make any real difference. The planned reduction in civil service jobs may well dissuade civil servants from taking out large mortgages.

Teresa Perchard, Citizens Advice Service

We are absolutely delighted the Government has decided to change the way decisions are made about borrowing money from the Social Fund budgeting loan scheme, and to lower the repayment rate. At present these rules mean many poor families are denied access to interest-free loans because they already have loans from the fund or the repayment rates, which can be as high as 25% of weekly income, are just too high. The effect is only to drive poor families into the hands of loan sharks and extortionate money lenders.

Citizens Advice has long campaigned for exactly this sort of legislative change. Coupled with proposals for a new Financial Inclusion Fund and improvements in the availability of money advice, the spending round holds the promise of a better deal for those low-income households that need to borrow money in future.

Paul Thomas, Opus Commercial

The review addressed all the necessary issues relating to investment in vital spending programmes. The Chancellor’s proposal to raise the housing budget from £5.9bn this year to £7.2bn by 2007 will have a stabilising effect on the price swings that have posed a major threat to the nation’s economic stability and the FTB market.

However, the Chancellor is taking a calculated gamble. As part of the review he has proposed a cull of the civil service which will, it is proposed, cut administration costs, reduce overheads and drive profits. This is all very well from an economic perspective but if he misses his targets he will need to raise taxes, which may ultimately lead to an increase in interest rates. If this situation arises, it will have an adverse effect on the housing market as consumers’ disposable incomes will be reduced and many will find it difficult to service their mortgage.