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Barker gets centre stage but Miles is in shadows

With two key reports on housing and mortgages leading into the Budget, the difference in Gordon Brown&#39s adoption of their proposals is startling.

The Miles report has effectively been sidelined, as many in the industry expected, with a minimal mention by Brown that it will be considered by the FSA and the Treasury.

Read this as meaning that there will be no artificial structures to ease the funding of long-term fixes or legislation forcing lenders to offer their new business rates automatically to all customers.

Barker, by contrast, was everywhere in the detail. Key-note points are a definite adoption of property investment funds and a liberalising of the planning regime. The Pifs consultation paper reveals that residential is a prime target both for expanding institutional investment and increasing the social housing stock.

This looks like the Government&#39s main platform for residential investment as the Budget was silent on previous Treasury statements that direct investment in residential property by Sipps would be allowed.

The bombshell was in the clear intention that a planning gain supplement is to be introduced to tax the development gain on land once planning is granted. It is unclear at present whether this will be levied on grant of planning at the outline stage or on the gain crystallising on a sale to a developer.

To the surprise of many, stamp duty was untouched so another opportunity to help the first-time buyers was lost. Brown again revealed his fundamental lack of understanding of this end of the market.

Pifs will produce more demand, thereby fuelling inflation, and Barker&#39s recommendation on new-build volumes undershoots Shelter&#39s views on new starts by around 70 per cent so supply is unlikely to catch up.

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