The Chancellor started his speech by reminding us all that the backdrop to the housing market was healthy with inflation and interest rates at their lowest levels for 35 years.
It was therefore unlikely that he would do anything to jeopardise the confidence that exists. He duly took a year off from increasing stamp duty and posted a largely neutral budget for the property market in the main.
His commitment to a target inflation of 2.25% at this time next year and 2.5% at the end of next year signals continuing stability to the interest rate environment with scope for possible reductions later this year.
He did announce further moves to encourage the clean up of contaminated land, and a further initiative designed to bring additional properties to the market through a reduction to 5% in the VAT on homes renovated for occupation that have been left empty for at least 3 years.
He also announced 100% capital allowances for the renovation of property over commercial premises for letting purposes. This does little for the mortgage market as this type of property has traditionally been harder to mortgage and sell. Therefore initiatives to encourage the use of this property for letting appears sensible.
The most significant move was to announce a 100% exemption on stamp duty for property transactions in disadvantaged areas (postcodes to be announced). The idea is to encourage business and families to move into and help regenerate these areas which in itself is admirable, however the initiative may well prove to be something of a double edged sword for those already living in there.