There are mixed views about whether last week’s budget was great news for the Housing industry.

The most prominent new initiative announced by the government is the £250m Firstbuy Direct scheme that offers first time buyers a 20% equity loan (split between housebuilders and the government) to help finance their first new home.  Housebuilders will no doubt continue to keep the pressure on the government as a raft of other initiatives are also working through the system that should help reduce regulation.

Although Firstbuy Direct goes further than the previous HomeBuy Direct initiative, a number of analysts argue that the figures released by the government suggest Firstbuy is directed at an average house price of £250,000, and will therefore only benefit London and the South East.

There is also the small matter of the effect of rising inflation on people’s average earnings for the coming year.  The newly appointed oversight quango, the Office of Budget Responsibility (OBR) has stated that average earnings fell in real terms last year and will do so again this year and next year.  If, as expected, taxes and mortgage rates rise too, where will that leave those first time buyers who have taken up Firstbuy Direct?  Leading lenders know this and will undoubtedly look closely at any first time buyer to assess whether they can meet their payments if interest rates do rise.

From the governments point of view though, Firstbuy will help create jobs in the House building industry, as new homes will need to be built, and this will provide jobs for construction workers who may be out of work. 

In short, the budget will help the UK housing market, but it will help housebuilders the most and the stock exchange knows this – why else would shares in most of the major UK housebuilders rise last week?.

Despite the mixed views, it is still positive news for the housing industry, and that has to be welcome.

If you want to know more about pay and reward trends in the Housebuilding industry, contact Tim Kellett at This e-mail address is being protected from spambots. You need JavaScript enabled to view it for more information.

About PAYdata

Since 1995, we have grown a strong reputation as a leading source of salary data and reward expertise. To find out more about our full range of services click here.

To receive regular news & blog updates follow us on Twitter @PAYdata_ltd