House-builders will pick up the pace of work on sites across Lancashire after a multi-billion pound bid by Chancellor George Osborne to get the market moving.
Paul Rowley, managing director of Leyland-based Rowland Homes, said the £3.5bn Help to Buy scheme announced in yesterday’s Budget would enable developers to get sites completed and move onto the next project quicker.
The scheme offers interest-free loan worth 20 per cent of the value of a new-build house to those people able to find a five per cent deposit.
It broadens out a previous scheme, First Buy, which has been offering equity loans to first-time buyers only by offering help to all movers.
Mr Rowley said: “At the moment, if we got a site to build 100 homes on, we would need four years to complete it, whereas six or seven years ago we could be on and off again in 18 months.
“I do not think this initiative will get us back to that level but it crteainly ticks all the boxes for us.
“Unlike the old First Buy scheme where the developer had to put up 10 per cent equity, we can use that money to put straight into new projects.”
Mark Chadwick, residential development director for Hollinwood Homes, the house-building arm of Garstang-based construction firm, the Marcus Worthington Group, said the announcement was “positive” for the house-building industry.
He added: “The Chancellor has put together a series of initiatives that seek to stimulate the housing market further and help people get onto and up the property ladder, which are most welcome and should have a ripple effect for the wider economy.”
Simon Ainsworth, head of the private client division at Preston-based law firm Napthens, said the initiative would encourage builders to develop more speculatively.
He said: “I would hope it would encourage developers to start building out on the land they have banked for many years – they should be able to build on a more speculative basis with the reassurance that buyers can borrow from the government as well as from mainstream lenders, who do still need to continue to relax lending criteria.”
The scheme is aimed at those struggling to find mortgage deposits and will include £3.5 billion for shared equity loans, and a Government interest-free loan worth 20 per cent of the value of a new-build house.
The Chancellor said on Wednesday the scheme will be available to everyone who wants to buy a home from next year.
A new mortgage guarantee, sufficient to support £130 billion of loans, will help people who cannot afford a big deposit.
The Government will also offer interest-free loans for five years for those wanting to buy new-build homes.
The loans will be available to those who can find a 5 per cent deposit with the loan worth up to 20 per cent of the value of a home worth up to £600,000 and repayable when it is sold.
Chris Fry, head of property at finance firm KPMG in the North West, csaid the initiative was the “perfect get out of jail card” for the Chancellor.
He added: “ It’s a bold move but one that will be undeniably welcomed by the region’s construction industry.
“The Government has finally recognised that housing might offer the fastest acting pain relief for our economic woes and, perhaps despairing of local authorities to be proactive in supporting new house building, has decided to focus stimulus on demand.
“By opening the scheme to all buyers of new-build houses up to £600,000 in value, the Chancellor has thrown the UK house building industry a new lifeline. Ultimately, the construction industry and all trades that support construction of new houses in the UK will benefit from the new scheme.”
Michelle Thompson, head of conveyancing at Lancashire law firm Forbes Solicitors, said people looking to move home were “the winners” of this year’s Budget.
She said: “It is all positive news at a time when there are already signs of improvement in the property market.”