Only 26.3pc of people planning to buy a property during the coming 12 months are first-time buyers, according to property website Rightmove.

Rightmove questioned more than 35,000 people and found the [...]]]> The labour Government’s stamp duty exemption for first time buyers has failed to boost the number of people hoping to get on to the property ladder.

Only 26.3pc of people planning to buy a property during the coming 12 months are first-time buyers, according to property website Rightmove.

Rightmove questioned more than 35,000 people and found the figure is just 0.5pc higher than when the same survey was done in January, despite the latest research being carried out two weeks after the Government announced that it was suspending stamp duty for two years for first-time buyers purchasing a property costing up to £250,000.

The group warned that the figure also fell well short of the 40pc of buyers it is thought should be first-time buyers in order to have a healthy housing market.

A rise of just half a per cent on the past quarter falls a long way short of the desired impetus many were hoping the new stamp duty threshold could bring.

First-time buyers are vital at the foot of the property market food chain, but these results suggest this area of the market has been left malnourished by the recession and restrictive lending.

London has the highest proportion of potential buyers who will be purchasing their first home at 43.3pc, more than double the 20.9pc in the South West and well up on Wales’s 22.4pc.

Around 54pc of first-time buyers think it is a good time to purchase a property, while 52pc expect prices to be higher in 12 months.

The value of 10 Downing Street has plummeted in value while Gordon Brown has been in residence according to new research.

The property is valued at £4.5 million, a drop of [...]]]> Having sold the nation’s gold reserves at the bottom of the market, it seems that Gordon Brown’s shocking financial ineptitude also extends to his current property.

The value of 10 Downing Street has plummeted in value while Gordon Brown has been in residence according to new research.

The property is valued at £4.5 million, a drop of 9.18 per cent since he became Prime Minister in June 2007, costing the taxpayer more than £460,000, according to data compiled by property website Zoopla.

It is in sharp contrast to Tony Blair who saw the property’s price climb from £1.65 million when he took office in 1997 to more than £5 million when he handed the keys over to Mr Brown.

If there is a change in leadership over the next few weeks, Gordon Brown is likely to drop quite a few rungs on the property ladder as house prices in his own constituency of Kirkcaldy and Cowdenbeath are among the lowest in the country, averaging £120,910 compared to his current address in SW1 where average house prices are £920,361.

Nick Leeming, commercial director at the property website Zoopla.co.uk, said: “10 Downing Street is one of the most exclusive addresses in the country, with a valuation to match. It is one of the few properties that will likely never come on the market and it takes millions of votes to secure the keys.”

Gordon Brown has been a Downing Street resident for 13 years.

Despite job cuts across the industry continuing at a sharp rate, a growth in new orders fuelled an upturn in construction activity and fresh optimism among the sector, according to the Chartered Institute of Purchasing and Supply (CIPS).

The CIPS/Markit Construction [...]]]> Construction activity grew in March for the first time since 2008 with a resurgence in housebuilding.

Despite job cuts across the industry continuing at a sharp rate, a growth in new orders fuelled an upturn in construction activity and fresh optimism among the sector, according to the Chartered Institute of Purchasing and Supply (CIPS).

The CIPS/Markit Construction Purchasing Managers’ Index, which measures construction activity, rose to 53.1 points in March, up from 48.5 in February and the first month it has grown since February 2008.

After two years of contraction, the rise was led by an increase in commercial property and housebuilding, which recorded a seventh rise in successive months.

Yet civil engineering, which is driven primarily by public spending, remained in decline and actually increased its pace of contraction during March.

David Noble, the chief executive of CIPS, warned against the longevity of the apparent turnaround. “The recession hit construction the hardest and because the industry is operating from such a low base, this upturn may be short-lived,” he said.

The data is a welcome lift for the departing Gordon Brown, who yesterday formally asked the Queen to dissolve Parliament, setting the general election for May 6.

The 1% stamp duty band – which cover homes worth between £125,000 and £250,000 – will be abolished for two years, but for first-time buyers only.

The Nationwide said it would [...]]]> In an attempt to keep sales ticking over, last week’s Budget introduced a new policy to try and encourage the UK housing market to keep moving.

The 1% stamp duty band – which cover homes worth between £125,000 and £250,000 – will be abolished for two years, but for first-time buyers only.

The Nationwide said it would save £1,368 for the average first-time buyer, but it is not certain if it would made much difference to the market as a whole.

Over the course of the last stamp duty holiday, there was a modest increase in house purchase transactions, with most of the pick-up seen during the second half of the exemption period up until December 2009.

However, transactions remained well below normal levels throughout and it is not clear how much of the pick-up was attributable to other factors such as the record cut in interest rates.

The number of homes sold in the UK rose in February. Figures from HM Revenue & Customs (HMRC) have shown that the number of completed sales rose by 14% from January, to 58,000 last month.

But this was still substantially fewer than the 103,000 sold in December.

With figures from the Bank of England showing on Monday that the number of new mortgages approved for home buyers fell slightly from January to February, the property market seems likely to stay subdued for at least the next few months.

Although more supply has begun to come on to the market, it has yet to reach the level where it is matching demand,according to the Royal Institution of Chartered Surveyors (Rics).

The poll of 1,200 members suggested 45% thought Wednesday’s budget would damage the economy, while 16% said it would be positive. The rest were neutral.

Mr Darling’s Budget has dented confidence, say [...]]]> More than two thirds of business leaders think labour Chancellor Alistair Darling is doing a bad job, a survey by the Institute of Directors suggests.

The poll of 1,200 members suggested 45% thought Wednesday’s budget would damage the economy, while 16% said it would be positive. The rest were neutral.

Mr Darling’s Budget has dented confidence, say business leaders. Respondents were also sceptical about government plans to cut the fiscal deficit by a half within four years.

The chancellor was also accused of ducking the issue of debt reduction.

The survey, carried out in the 24 hours after the chancellor’s budget speech, suggested 64% business leaders thought the fiscal deficit would get worse following the budget.

A further 12% thought it would get better, and the rest were unsure.

Director general, Miles Templeman, said: “It’s deeply worrying that instead of boosting confidence, the budget appears to have had the opposite effect.

MPs described the labour Government’s approach to advising people in debt as a “triumph of bureaucracy over practicality” and urged it to “shake up” its strategy to meet the increasing demand [...]]]> The labour Government’s free debt advice service is being forced to turn people away after being unable to cope with a 28pc jump in demand.

MPs described the labour Government’s approach to advising people in debt as a “triumph of bureaucracy over practicality” and urged it to “shake up” its strategy to meet the increasing demand for help in the current economic climate.

The Public Accounts Committee said the Department for Business, Innovation and Skills’ approach to debt advice was “unnecessarily complex”, with more than 50 different projects and a number of funding streams. Edward Leigh, the chairman of the committee, said: “The whole thing is undermined by poor co-ordination and a lack of clarity about who is in control of it all.”

Consumers owed £1.46 trillion in debt at the end of last year, with personal borrowing representing 160pc of household annual pre-tax income. The recession has caused demand for debt advice to soar, with research suggesting around one in 10 people are struggling to keep up with their borrowings.

But the Government’s free face-to-face service struggled to cope with the 28pc rise in the number of people contacting it during the year to July 2009, leading to a quarter of agencies either turning consumers away or forcing them to wait for more than a month for help.

Richard Bacon, a member of the Public Accounts Committee, said: “At present, the Government is not always using the most cost-effective means of reaching people in need of help with their debts. It costs an average of £265 to provide face-to-face debt advice, but telephone advice costs just £51 and internet advice is cheaper still.”

He said one in four people who saw a debt adviser face to face said they would actually have preferred to have been given advice over the telephone or through the internet.

He said: “The Department for Business, Innovation and Skills needs to use the money it deploys more effectively in order to address the gap between the demand for debt advice and the Department’s current capacity to provide it.”

The Homeowner Mortgage Support Scheme was announced in a big fanfare a year ago to help struggling borrowers stay in their homes, but has ended up helping just 15 families so far.

The labour [...]]]> A labour Government scheme to help homeowners avoid repossession has cost the equivalent of £165,000 for each of the households it has rescued.

The Homeowner Mortgage Support Scheme was announced in a big fanfare a year ago to help struggling borrowers stay in their homes, but has ended up helping just 15 families so far.

The labour Government confirmed today that the scheme has cost the taxpayer £2.5 million.

Experts criticized the cost as “unbelievable” when it had helped so few home owners.

With the average price of home £165,000, they suggested the Government may have just have bought the homes outright for the 15 families it had helped.

Shadow housing minister Grant Shapps said: “These figures will be a slap in the face for the 1,000 families who are being repossessed every week. It’s unbelievable that during the deepest recession since records began the Government is spending millions on a scheme that has been mired in uncertainty and helped just 15 families”

The Homeowner Mortgage Support Scheme is one of several labour Government measures to help struggling home owners. It allows those facing a loss of income to reduce their monthly mortgage payments for up to two years.

Increasing numbers of home owners are falling behind on their mortgage payments, with almost 270,000 at least three months in arrears at the end of September this year, compared to 166,000 during the same period a year earlier, according to the Council of Mortgage Lenders. And the number of repossessions stands at one household in every 1,000.

Other Government measures aimed at those at risk of having their home repossessed include the Mortgage Rescue Scheme, where eligible families can either get an equity loan to reduce their mortgage, or sell their home and remain as tenants.

The Chancellor told the House of Commons that the break from stamp duty, under which anyone buying a [...]]]> The labour Chancellor’s decision not to extend the stamp duty holiday on lower-value homes was a “poke in the eye” for first-time buyers, analysts warned yesterday, adding that the move threatened the fragile recovery in the housing industry.

The Chancellor told the House of Commons that the break from stamp duty, under which anyone buying a property for £175,000 or less avoids paying the 1 per cent tax, would end on 1 January. The threshold has been in place since September 2008 when Mr Darling increased it from £125,000. The threshold will go back to £125,000 at the start of next year.

Research has indicated a steady improvement in house prices in the last six months. Halifax’s House Price Index, published on Tuesday, showed a bigger-than-expected 1.4 per cent jump in November. However, market analysts have suggested that the rise has been because of restricted supply, rather than a genuine thawing of the market. Most argue that higher unemployment could force prices back down in 2010.

While the removal of the stamp duty holiday will have little impact in London, where average prices are well above the £125,000 threshold, other areas of the country will be hit hard.

Housebuilder Barratt Developments said that it would continue paying the stamp duty on all its homes up to the value of £250,000.

The Royal Institution of Chartered Surveyors said the end of the stamp duty exemption on properties costing up to £175,000 could have a “detrimental effect” on the recovery in [...]]]> The end of the Government’s stamp duty tax holiday will hit the UK housing market hardest in regions that are already failing to benefit from the recovery.

The Royal Institution of Chartered Surveyors said the end of the stamp duty exemption on properties costing up to £175,000 could have a “detrimental effect” on the recovery in areas that were lagging behind the rest of the country. 

David Cameron said that while Mr Brown was accusing the Conservatives of planning cuts of 10 per cent, and insisting that he did not want to do the [...]]]> Gordon Brown was accused last night of misleading the Commons after leaked Treasury papers disclosed unpublished government plans to cut spending by £36 billion a year by 2014.

David Cameron said that while Mr Brown was accusing the Conservatives of planning cuts of 10 per cent, and insisting that he did not want to do the same, his own officials were telling him that spending might have to be reduced by 9.3 per cent in five years.

The papers suggest that the Treasury privately took a far more pessimistic view about long-term unemployment and the cost of servicing the national debt than did independent commentators at the time of the Budget.

The document, headed HM Treasury Fiscal Tables, projects that spending will be reduced by just under 1 per cent in 2010-11, 4 per cent in 2011-12, just under 2 per cent in 2012-13 and 3 per cent in 2013-14.

Based on figures published at the time of the spring Budget, the Institute for Fiscal Studies (IFS) suggested that the Government would cut spending by 7 per cent by 2014. The Treasury’s own “assumptions”, based on Alistair Darling’s declared intention to cut the budget deficit in half by 2014, were more conservative than that. Its figures, circulated within the Treasury in June, suggested that social security spending would rise to £193billion, a real-terms increase of 2.1 per cent, as late as 2013-14, squeezing government spending elsewhere.

The papers also project that debt interest payments will rise from £27billion this year to nearly £64billion in 2013-14. The IFS had based its figures on the payments rising to £52billion.The leak was damaging to Mr Brown but also presents a challenge to Mr Cameron, who has said that he will cut the deficit faster than Labour.

Conservative officials emphasised last night that the figures showed the scale of the task facing any government. They pointed out that their existing plans meant that they would begin cutting spending a year earlier than Labour.

Mr Cameron told a press conference that Mr Brown’s integrity was on the line. “Gordon Brown was denying something that his own civil servants were telling him was true,” he said. It was a “cover-up” of the true state of the nation’s finances.

“Wednesday after Wednesday, the Prime Minister stood up in the House of Commons and repeated the line that the coming battle was between Labour investment on the one hand and Tory cuts on the other,” he said. “All those words have turned to dust and, as I consistently warned week after week, reality has now caught up with our Prime Minister.”

Mr Cameron said that the Conservatives had been candid about the need for spending cuts and would spell out their plans in more detail closer to the next election. “Let me make it clear: they are not wrong to be planning cuts but they are wrong to try to cover up their plans for cuts,” he said.

“This is about honesty, it is about trust. This is about not taking people for fools and on this issue, as I have to say on so many others, the Prime Minister does not seem to have learnt.”

George Osborne, the Shadow Chancellor, went farther, saying: “This is about Gordon Brown misleading the House of Commons, not telling the public the truth about his own Budget.” 

The Bank of England has a whole variety of counter-cyclical policies it could have used to avert the crisis, say economists.

In a comprehensive analysis of the causes for [...]]]> The Labour government and central bankers must take the blame for the financial crisis – not bankers, investors and others in the market, according to a new study.

The Bank of England has a whole variety of counter-cyclical policies it could have used to avert the crisis, say economists.

In a comprehensive analysis of the causes for the financial and economic crisis, the Institute of Economic Affairs (IEA) has concluded that the disaster was caused by authorities’ mistakes rather than market failures.

In an associated letter to The Daily Telegraph, the IEA, supported by a number of leading economists, including Tim Congdon and John Kay, said that despite these failures regulators were being rewarded with more responsibilities.

The study suggests that hedge funds and tax havens should not be unduly punished, and that in the future central banks and regulators should pay greater attention to imbalances building up in the economy.

The detailed analysis, Verdict on the Crash, will come as a further blow for Gordon Brown, claiming that the system he created to monitor the financial and economic system was found entirely wanting and is in need of a major overhaul.

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”Debt freedom day”, when the national debt returns to sustainable levels, will not be reached until 2032 – another 23 years away, the respected Institute for Fiscal Studies said.

Families [...]]]> The unprecedented burden of public debt built up by Gordon Brown will not be brought under control for nearly a quarter of a century, economists have said.

”Debt freedom day”, when the national debt returns to sustainable levels, will not be reached until 2032 – another 23 years away, the respected Institute for Fiscal Studies said.

Families could soon find themselves paying at least another £1,400 a year in tax as part of the Government’s attempts to bring public debt back under control, the IFS predicted.

It said there was a gap between the amount of money that would be raised by the tax measures in this week’s Budget and the amount the Government will need to fund its spending plans.

This secret “blackhole” could end up adding another £1,430 each year to the average families’ tax bill, it said.

The stark warning of a generation of austerity ahead came as Alistair Darling admitted he could not be sure his optimistic forecasts for a quick economic recovery would be realised.

“It is very difficult to be absolutely certain as to what will happen,” he admitted.

The Chancellor’s predictions for growth to resume by the end of this year and to reach boom levels again by 2011 have been widely questioned, with the International Monetary Fund suggesting the British economy would actually shrink next year – despite Mr Darling’s forecast of modest growth. “The crisis is far from over,” it said.

The IFS warned that despite the tax rises and spending cuts announced in the Budget this week, future chancellors would be forced to raise even more money to fill a “breathtaking” long-term hole in the public finances.

The scale of the problem is so great that even with years of tax rises and spending cuts, the national debt will not be low enough to meet Gordon Brown’s now-abandoned “sustainable investment rule” until 2032. This “golden rule” dictated that Government debt should not rise above 40 per cent of Gross Domestic Product (GDP).

In the Budget however, Mr Darling said he would borrow another £700 billion over the next five years, pushing the accumulated stock of Government debt to £1.4 trillion, equal to almost 80 per cent gross domestic product.

The golden rule on borrowing, which Mr Brown actually announced when he was Chancellor, has been “temporarily suspended” as the UK economy endures the worst recession for 60 years.

Mr Darling has set out plans for debt to peak at 76.2 per cent of GDP in 2013/14. Paying the interest on that debt could cost as much as £58 billion a year by then, more than annual spending on schools in England.

Bringing the debt back to the level Mr Brown once said was necessary for economic stability will take another 23 years, according to Carl Emmerson, an IFS economist. “Public debt will remain high for a generation,” he said.

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Mr Darling cemented his reputation as the Chancellor with the worst forecasting record in modern history after he [...]]]> Alistair Darling’s 2009 Budget has been derided as a stew of unrealistic forecasts and missed opportunities, after the labour Chancellor conceded the current slump is comparable with the Great Depression but insisted it would be over by Christmas.

Mr Darling cemented his reputation as the Chancellor with the worst forecasting record in modern history after he slashed his projection for British economic output this year to -3.5pc.

Unveiling the biggest increase in government borrowing since the Second World War, he conceded that Britain’s national debt will double to around £1.2 trillion in the coming years, and that the budget would not return to balance until 2018 or later.

In what economists described as a “fantasy Budget”, Mr Darling imposed swingeing new taxes on those who earn more than £150,000, which will raise as much as £5.5bn a year by 2012 – one of the biggest per-capita tax increases in recent history.

But while he will try to trim some departmental budgets, he will nevertheless increase the total amount the labour Government will spend this year and the next by £37.6bn. This indicates that if he does intend to balance the nation’s books, he will do so not with spending cuts but with tax rises.

However, the proposed tax and spending measures pale into insignificance against the scale and extent of the economic and fiscal crunch mapped out in the Budget small print.

The documentation reveals that this year’s economic contraction will be the worst in any year since the end of the Second World War. Indeed, according to the International Monetary Fund, this year is likely to be the worst since the 1930s, as countries around the world slump into a synchronised slowdown.

The Chancellor predicted that despite shrinking by 3.5pc this year, the UK economy would start growing again “towards the end of the year”, with 1.25pc growth next year and 3.5pc from 2011 onwards. Last night economic historians were trying in vain to find examples of developed countries that had stomached so significant a one-off drop in growth and yet managed to recover within 12 months.

As the IMF pointed out last week, recessions associated with financial crises tend to be more protracted and virulent than almost any other type, and that is precisely what the UK faces.

Indeed, alongside many City economists, the IMF expects the UK economy to shrink by a further 0.4pc next year – significantly below even the Chancellor’s revised forecasts.

Dig a little deeper into the Budget and it becomes clear that the Treasury expects nothing short of a full-scale consumer recovery – if not boom – in order to satisfy its projections. Such a prospect seems unrealistic if not outlandish, according to City experts.

Even taking at face value the Chancellor’s forecasts, the UK will have to borrow some £175bn this year and £173bn the next to make up for the shortfall in tax revenues and extra demands on the public purse from increased social welfare spending.

At over 12pc of gross domestic product, these represent the worst years for the public finances since the 1940s. However, the optimistic economic forecasts are doubly significant in this case because higher growth means a lower deficit. Should the Chancellor’s economic projections be proven wrong, the eventual outcome for the national accounts will be worse still, according to City analysts, with total borrowing likely to surpass £200bn and not to peak until next year.

The tidal wave of extra debt will push up Britain’s net national debt from below 40pc – one of the ceilings set by Gordon Brown in 1998 but since abandoned – to almost 80pc.

The Treasury said it still had no plans to reinstate any fiscal rules to bring its borrowing back under control in the future. In fact, it said it did not expect the budget to come back into balance until 2018 or beyond.

The Budget came amid continuing bad economic news, with the Office for National Statistics announcing that unemployment jumped by 177,000 to 2.1m in the three months to February, taking the jobless rate to 6.7pc.

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