Pictured: Rob Champion 

The Government's new strategy announced on Monday to stimulate the economy by kick-starting the housing sector has been given a cautious welcome by a leading Midlands firm of property consultants.

Rob Champion, of Worcester-based Halls Estate Agents and Chartered Surveyors, said the measures announced by housing minister Grant Shapps would 'get Britain building again', help first-time buyers, create jobs and provide more much-need affordable housing.

However, he urged caution and warned that some of the proposed financing arrangements could lead to further debt burdens on the UK economy.

The key areas of the stimulus package include: subsidising mortgages for first time buyers up to 95% loan to value; pump priming stalled developments by giving developers the chance to bid for public sector funding (with a particular emphasis on addordable housing); and increasing the discount available to council house tenants when exercising their 'right to buy'.

Mr Champion said: "The market is currently very sluggish and there is no doubt that more housing is required in all areas of the country to meet the demand; we are a long way behind the rate of growth in population and there it is apparent we need more housing both in affordable and open market terms. 

"A stimulus in terms of mortgage financing and through development funding will certainly help get Britain building again. The first time buyer market has been close to non-existent with mortgages being almost impossible to obtain due to the requirement for proportionately high deposits. 

"This has significantly depressed the rates of sales for new homes being built which has, in turn, increased the risk on developers who are themselves struggling to fund further development, particularly in cases where high prices have already been paid for land. 

"The Government's proposals would help stimulate the development process, getting developers back to developing and improving the affordability of house purchases, thereby ensuring the finished product is capable of being sold. Furthermore, the proposed increase in the 'right to buy' allowance could help to provide more funding to sustain the process and provide a much needed incentive for people to invest in their homes.

The knock-on effect of this is that employment surrounding the building industry will pick up as labour is required to fulfill the processes, placing a much needed stimulus back in to the building and trade industries." 

He added: "That said, the Government will need to approach all of this with caution; using taxpayer's money to underwrite higher loan to value mortgages places the country's finances in a potentially precarious position where it may have to pick up the pieces in the event of further economic downturns and housing market falls. 

"Furthermore, the 'right to buy' initiative is only truly sustainable if tenants are genuinely going to be able to meet their borrowing obligations and are not going to be thrust into negative equity as and when interest rate rises appear.

"All in all, the proposals appear to be good news for the property market. However, careful thought needs to be given to ensure that the proposals are truly sustainable in economic terms and will not lead to a situation whereby too many people are exposed to significant interest repayment obligations which could just take us back to where we have been; a country consumed by debt."

Halls provides specialist property services to a wide range of clients throughout the Worcestershire, Herefordshire, Shropshire and wider Midlands Region.