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Government announces 250m pounds to help first-time buyers

This afternoon, George Osborne, Chancellor of the Exchequer, announced his second budget since coming into office ten months ago. The speech, widely billed as the ‘Growth Budget' to contrast with last year's ‘Austerity Budget', is charged with encouraging the investment and entrepreneurial spirit to bring Britain out of the difficult economic climate.

There were several key statements for the planning sector made in today's speech, including some included in the Localism Bill and some that have been mooted to appear in the National Planning Policy Framework. The policies announced include: 

• Cumbersome planning laws "stand in the way of new jobs". All planning bodies will be expected to prioritise jobs and growth. Planning reforms will include a presumption in favour of sustainable development (which the government has already announced will appear in the National Planning Policy Framework);

• Localised choice about the use of previously developed land, removing national targets while retaining existing controls on greenbelt land;

• Pilots will be introduced for auctions on land sales starting with public sector land;

• Introduce a number of measures to streamline the planning system, including a 12 month guarantee for the processing of all planning applications, including any appeals;

• Ensure a fast-track planning process for major infrastructure applications through the Major Infrastructure Planning System (as announced in the Localism Bill);

• Profits from the bank levy will fund a new £250m shared equity scheme for first-time buyers with a household income of less than £60,000, targeted at helping 10,000 families get onto the housing ladder for the first time. The buyer will have to be able to put down a 5% deposit on a new home to be eligible for an equity loan worth up to 20% of the value of the property jointly funded by the government and housebuilders. The loan will be interest-free for five years, and will only be repayable when the house is sold. It is expected that this will lead to the building of 10,000 new homes and protect 40,000 jobs in the construction industry;

• There will be 21 "enterprise zones" and local authorities will be allowed to keep "business rate growth" in their zone;

• There will be 100,000 places in a new work experience scheme over the next few years and 40,000 extra apprenticeships will be funded for young unemployed people;

• Three forms of stamp duty land tax avoidance will be shut down, among other measures attacking tax avoidance, which will raise £1bn a year;

• The Government will consult on proposals to make it easier to convert commercial premises to residential; and

• The Government will work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing, using a ‘build now, pay later' technique. Not only will this help accelerate the release of public sector land to support homes and jobs, it will also enable the Ministry of Defence to realise up to £350 million of estate disposals and enable the delivery of up to 20,000 new homes by 2014-15.

Aside from the announcements made today, a number of other measures will come into force on 6 April affecting the housing sector. For example, a new stamp duty rate of 5% will be charged on residential property purchases of more than £1m. This will initially affect just over 1% of residential property transactions, primarily in London.

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