NAEA and RICS Responses to Budget Stand Out for their Differences

With the amount of people and, bodies and groups in the property industry urging the Chancellor to do one thing or the other in this year's budget, it was only to be expected that the responses would be varied and loud when it finally came.

Some of you may even have been waiting for my response (vanity - and why not?), I will write a detailed article on what impact I think the budget will have on the UK housing market, but in the meantime, I wanted to publicise a couple of the responses from within the industry.

The responses from two major industry bodies in particular stood out for me.

the Royal Institute of Chartered Surveyors

The RICS reponse was largely positive, and overall a big pat on the back for Mr Darling.

"The Chancellor has recognised the need for assistance to the housing market as essential to helping Britain's economic recovery. Government action to support mortgage lending should help translate buyer interest, which has picked up in recent months, into actual sales. Additional funding for HomeBuy Direct and extending the stamp duty holiday should also encourage those wishing to get on the housing ladder, said RICS external affairs director Gillian Charlesworth.

That is an open-minded and fair response, that recognises the fact that the Chancellor has dedicated a significant effort to at least halt the housing market crisis, so that it can slowly be turned into a recovery, whilst not putting more weight on solving the housing crisis as the economic crisis as a whole.

And the National Association of Estate Agents because it ripped Mr Darling to shreds for not doing enough to help first time buyers, and "using a water pistol to try to put out a fire".

"The housing market is the engine of the UK economy and it is likely that this Budget will be remembered as largely ineffectual given the magnitude of the problem. There is very little here for first time buyers, who need more encouragement to climb onto the property ladder -- which will get everything moving. Mr Darling has used a water pistol to try to put out a fire," said NAEA Chief Executive Peter Bolton King.

It is not Darling's fault, nor can he change the fact that first time buyers are still largely priced out of the market, because prices haven't fallen far enough for them yet, and/or because of the large deposit necessary to get a mortgage. Not to mention the would-be first time buyers who could now afford to buy, but whose jobs have become/are becoming increasingly shaky, and who are becoming less and less willing to take the plunge.

First time buyers are great but they are not a miracle cure for the entire economy. I get fed up of saying it, but no one thing that is in part necessary for recovery, can bring about a recovery on its own, without all of the other things that also have their part to play.

Before the UK housing market to recover several things need to change:

• More mortgage availability and at higher LTV at more favourable rates
• Control over the spiralling unemployment
• More realism among vendors, which will likely be brought about by increased buyer numbers, which will come from the first two things being achieved.

In my full response to the budget I will tell you whether I think the Chancellor's budget has done anything likely to help the convergence of these recovery brining factors.