Gordon Brown pledged in his Pre-Budget Report this week to tackle climate change with an ambitious target of making every new home carbon neutral within ten years.

Details will be announced next week, but to start the scheme the Chancellor will, for a limited period, exempt new zero carbon homes from stamp duty.

“Investment in housing will be nearly £8 billion next year, with sustained investment into the next spending round,” he told the Commons.

The other housing issue in his report was the expansion of shared equity schemes.

GREEN HOMES INCENTIVE

The exemption from stamp duty for new zero carbon homes will be welcomed but there is a lack of consensus over carbon neutral.

Stewart Baseley, executive chairman of the Home Builders Federation, says: “We need a common system of measurement that both consumers and business can relate to.”

New-build properties account for only 0.8 per cent of housing in this country, and most of the 25 million existing houses are environmentally inefficient.

David Stubbs, senior economist at the Royal Institute of Chartered Surveyors, questions whether housing can be affordable and green. “There will be no financial incentive to purchase 0 per cent carbon homes below the threshold of £125,000, because they do not pay stamp duty anyway. Until the Government stops making these pitiful attempts to convince the public that it is committed to tackling climate change , we will never reach our targets to reduce CO2 emissions”.

SHARED EQUITY SCHEME

The Government wants to double the number of people in its Open Market HomeBuy Scheme. It hopes to help 160,000 more households to become homeowners by 2010 through the scheme, which was set up in October to help cash-strapped first-time buyers on to the property ladder. The scheme has not caught on with buyers or lenders, however.

It works by buyers taking out a mortgage for 75 per cent of the property value and the Government and lender sharing the other 25 per cent, which is called an equity loan. The government loan is interest-free and interest on the lender’s share gets paid only after five years. The scheme has not been popular; the rates on the 75 per cent mortgage are higher than for usual mortgages. There are also restrictions on who is eligible, with the local housing authority having the final say.

The real battle will be enticing lenders to join the scheme. “This is desperately needed,” Melanie Bien, for the housing finance advisers SPF Sherwins, comments. “The products are quite limited, with just four lenders offering them. If more lenders can be persuaded to join it is likely to become more competitive, making it easier to get on the housing ladder.”

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