The National Housing Federation (NHF) said that the Help to Buy scheme, which will provide equity loans and mortgage guarantees to home buyers, had "the potential" to help a number of people into home ownership. However, it said that there is a risk that the Government is "simply helping people that could already buy a house without Government assistance".
“We welcome the Chancellor’s realisation that people around the country are struggling to buy their own homes, and the measures introduced today may help a number of them," said NHF chief executive David Orr in a statement.
"But the danger is that if we don’t tackle the fact we’re still not building enough homes, we’ll just create another housing bubble that will continue to push house prices up and out of reach of the majority."
“Our housing market has long been weakened by the lack of new houses being built, which are forcing up rental and house prices – leaving millions of people struggling to get on the property ladder or pay their rent," Orr said.
"The Government should be focusing on unlocking investment to build more new homes as a way of managing down the housing benefit bill and boosting the economy. We welcome the measures to support new supply but they are very small scale," he said.
The Chartered Institute of Housing (CIH) also warned that the measures could push house prices up if they "fail to stimulate house building on a big scale".
“The significant support for home ownership and construction through Help to Buy and the mortgage guarantee scheme is welcome recognition of the central role housing can play in powering our economic recovery," said CIH chief executive Grainia Long in a statement.
"Thousands of people have been locked out of home ownership by spiralling prices and these schemes will help to address that. However, government will need to monitor the impact of these policies carefully to ensure that they are increasing new house building rather than simply stoking up house prices," Long said.
“We are disappointed that the Chancellor has missed the opportunity to lift local authority borrowing caps so they can invest more in developing new homes. This move would release nearly £10bn of investment over five years, to build 15,000 homes a year, supporting 23,500 jobs a year and adding £5.6bn to our economy per year," she said.
The British Property Federation (BPF) said that the property industry greeted the Budget with a "muted cheer" and called the Chancellor's housing support package a "gamble".
"Overall there’s more good than bad for the property industry in this Budget, and the Chancellor appears to have avoided last year’s mistake of announcing half baked policies, like the 15 per cent stamp duty rate," said BPF chief executive Liz Peace.
“For too long time the size of deposit needed to get on the housing ladder has proved prohibitive and has been the missing piece in a coherent housing strategy, it’s good to see the Government move to remedy this," Peace said.
"Time will tell whether this policy will prove effective, but taken with the fivefold expansion in the ‘build-to-rent’ fund the Government is certainly tackling the problem head on."
