Budget boost for first time home-buyers
DREAMS of getting a foot on the property ladder may be a step closer to reality for some families struggling to scrape together the necessary deposits.
In his Budget yesterday, Chancellor George Osborne announced a £130 billion mortgage guarantee scheme, as well as making interest-free loans worth 20 per cent of the value of a new build property also available.
Both schemes are available to first time buyers and existing homeowners and are applicable to properties worth up to £600,000.
In both cases, buyers must provide at least a five per cent deposit without any help from the Government.
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But under an extension of the existing First Buy scheme, which begins on April 1, an interest-free equity loan of up to 20 per cent on new-build homes will be available.
The mortgage guarantee will be introduced to help people who cannot afford a big deposit and is not limited to new-build houses. The scheme is available from January 2014.
Mum-of-two Jennifer Kettle, aged 29, of Ball Green, said moving out of rented accommodation is something she has been looking into.
"Schemes like this are the way forward for families who want to move on and anything that helps people like us to climb the property ladder has to be a good thing," she said.
"It might give people hope that there is help out there if they have been struggling to save the bigger deposits, rather than them thinking they might not be able to move on from rented properties."
The intervention by the Government has been seen as a way to get the property market moving and give a shot in the arm to the construction sector. In its submission to the Treasury ahead of the Budget, North Staffordshire Chamber of Commerce called on the Government to prioritise spending to stimulate the construction sector.
Chamber president Phil Wood said: "The Help to Buy schemes are potentially really good news.
"If we can get houses built, then we need people who are in a position to buy them.
"This will encourage house building and there will be a knock-on-effect, not just for the tradesmen and builders working on the houses, but also the brick manufacturers and the tile manufacturers and the bathroom manufacturers.
"There could be a lot of jobs hinging on the back of this so it is potentially really good news."
Small businesses are also being encouraged to take on more staff with the introduction of a £2,000 per year employment allowance towards their employer National Insurance Contribution (NICs) bill, from April 2014.
Up to 2.5 million employers will benefit, while 450,000 of the country's smallest businesses will no longer pay any employer NICs.
Employers with fewer than 10 members of staff will see their employer NICs bill cut by £805, said the Treasury.
Mandy Robinson, creative director at Digital Delight, based at the Nova Centre at Keele University Science and Business Park, said any steps to create sustainable jobs should be welcomed.
She set up the business with her partner Alan Pierce in 2010 after being made redundant.
She said: "There are now four of us working here and it is a difficult step going from starting up your business to employing someone for the first time.
"New support for small firms through Government procurement budgets and growth vouchers is also something we would be interested in.
"It's good to see a commitment to inviting small companies to bid for Government work."
Mr Osborne also announced he was reducing the main rate of corporation tax to 20 per cent and scrapping a planned fuel duty increase.
Jan Gratton, deputy chief executive of the North Staffordshire Chamber of Commerce, said: "There are a number of positive measures that businesses will cheer.
"For smaller companies in particular, the new £2,000 employer reduction in NICs, the cancellation of the fuel duty rise, and the Growth Vouchers scheme will help reduce costs and support job creation.
"Companies will also welcome the reduction in Corporation Tax and the improved incentives for investment and research and development which help us to remain competitive.
"I am especially relieved to hear that the Government has recognised the importance of North Staffordshire's ceramics manufacturers and taken steps to reduce the onerous energy taxation that threatens their long term investment here in the UK.
"On the down side, there was also no further action on business rates, a key priority for our members and one which continues to place severe pressure on business cashflow."