The Chancellor yesterday gave a shot in the arm to the residential housing market – but there was little to cheer from the commercial half of the sector.

The main plank of his proposals was an extension of the Stamp Duty holiday on properties costing up to £175,000 until the end of this year – meaning60 per cent of home-buyers would not be liable for the tax.

Mr Darling also announced £500 million of extra financial support to kick-start housing projects which have stalled because of the credit crunch and said the Government would provide £50 billion worth of guarantees on mortgage-backed securities to boost lending.

But there was little to brighten the mood of commercial property firms as calls were ignored for empty rates relief to be reintroduced and a relaxation of Real Estate Investment Trust (REIT) rules to stimulate investment.

Debbie Walsh, head of public policy and communications at RICS West Midlands, said she was pleased that the Government had announced a new guarantee scheme for mortgages.

She said: “Addressing the availability of mortgage funding is a key factor in unblocking the depressed UK housing market.

“A Government-backed guarantee mechanism is a welcomed, although long overdue, intervention to help address this problem.”

Mr Darling unveiled a series of measures to help boost the housing market and beleaguered construction sector.

Many private developments have either been mothballed or not started at all as builders struggle under the problems in the financial markets, which have made it harder for people to raise the mortgage finance they need to buy a new home.

The problems in the housebuilding sector have put pressure on Government targets to have 240,000 new homes a year built by 2016, with just 105,000 new homes started in England during 2008.

Sue Warwick, national sales and marketing director of Miller Homes, said the extra cash to kick-start construction, which includes £100 million for councils to build new energy-efficient housing, was welcome.

She said: “The £500 million to help kick-start housebuilding and enable developers to resume building on mothballed sites is a crucial shot in the arm for the industry.”

West Midlands Business Council executive director James Watkins said: “Construction firms were the first sector that entered the recession – and their decline has hit everyone else in the business community – so putting money up front for major building works is a good first step.”

Professor David Boyd, head of Birmingham City University’s School of Property, Construction and Planning, said: “The investment of £500 million to kick-start stalled housing projects will provide a stimulus for this side of the industry regenerating many jobs that have gone. The measures to get credit flowing will stimulate housing purchases for those seeking to move.”

Mr Darling decided to extend the threshold at which Stamp Duty kicks in until the end of the year to encourage more property deals. The tax was initially increased from £125,000 to £175,000 for one year in September 2008.

Chris Warner, sales and marketing director of Crest Nicholson Regeneration, said the longer holiday was good news for the residential market.

He said: “The fact that the Stamp Duty holiday has been extended will do much to support those at the lower levels of the market and, forming part of a package of wider measures, will be integral in maintaining a flow of transactions.” 

However, Ian Thomlinson, director of residential development and investment at real estate firm Jones Lang LaSalle, said while the Stamp Duty holiday extension was welcome, making mortgages more available was more crucial.

He said: “Buyers are still struggling to obtain mortgages at affordable prices and at favourable loan to values.”

Directors of firms in the commercial property sector say they feel let down by the Chancellor’s Budget, in the face of unprecedented conditions.

Bob Tattrie, managing partner of Birmingham-based Trebor Developments, said there was no news for the commercial development sector in the Budget, even though it was desperately needed.

“Yet again we are left hoping for inspiration and some support, and being very disappointed indeed,” he said.

Tim Suffield, head of commercial real estate firm Atisreal’s Birmingham office, said there was little help for his firm at a time when empty rates taxes are eating away at cash flow.

He said: “The Chancellor has pretty well spurned the property industry today. The continuation of the Stamp Duty relief is a small sop to people when passing the test for a mortgage remains hard.”