The Chancellor of the Exchequer, has just put forward a £1.8bn bundle of measures to kick start the housing sector in his pre-budget report. The bundle of measures includes extra funds for social housing and increased help for People unable to pay their mortgages.

However, will it be enough to tempt back the Home Buyers and give normal People the confidence they need to begin to Buy Homes once more? Because, to have the confidence to do that, we all need to know that, if things go wrong for us in the future, at least we’ll be able to get somebody ready willing and able to Buy my House for a reasonable price.

Responding to the latest news that Home repossessions were at a nine year high, the Chancellor put forward a series of measures to give help for Home owners in financial difficulty, so making sure that repossession is always a last resort.

The government are also enlarging their mortgage rescue scheme under which Home owners will be able to sell their Home to a housing association and then rent it back at an affordable rent. Otherwise, they could just sell a share of their house. There’s also an expansion of the system to help Home Owners at risk of losing their Homes because of difficulties with second mortgages.

There is also a much improved bundle of measures to help People who are experiencing difficulties to manage their mortgage repayments. At present, no benefits are paid to cover mortgage interest costs until 39 weeks after the wage earner loses his or her job. This is now cut back to just 13 weeks. At the same time the maximum mortgage covered by the scheme will go up to £200,000.

An additional seven hundred and seventy five million pounds will also be spent this year and next on new and modernised social Homes, and whilst this is a very understandable & compassionate action to take, it must be understood that it may well reduce the number of Home buyers in the market, and this can only have a negative effect on Home values.

But many experts said too little had been done to revitalise the Home Sales UK market itself. They say the package won’t do enough for would be first time buyers who have to find much bigger deposits than previously. They also warn that Home Sales UK are in danger of being sucked into a serious downward spiral, because lack of mortgage money is causing sales to disappear, and therefore cutting down Home prices. This will, they predict, compel more Home owners into negative equity, giving rise to more repossessions, and in turn a faster fall in Home prices. Of course, any such problem won’t be isolated to the Home sales UK market. The pain will spread into supplier industries and through them into the rest of the economy.

The most pessimistic forecasts foresee a complete standstill or even a net negative figure for Mortgage Lending during 2009, with only a very slender amelioration in 2010.

On a more optimistic note, there’s hope caused by the very fact that the financial institutions are experiencing such deep seated problems themselves. This is causing many cash rich people and companies to enter the Home sales UK market, and to put their money into Homes. They’re doing this even though they know that house prices are still dropping, but they’re thinking that such falls will be temporary, and anyway, it’s better to lose a few percent, rather than risk losing the lot in a Bank collapse. These people and their irrepressible “We Buy Homes” message offer one of the very few positive patches in the present Credit Crunch.

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