HOUSEHUNTERS will be among those with a winning hand in the Chancellor’s £20 billion gamble, says Rowland’s boss.

The 2.5% V.A.T reduction will see people save on costs associated with moving, with pounds chipped off substantially priced items like white goods, carpets and furniture typically purchased by households making a fresh start in a new home.

Proposals to guarantee securities backed by new mortgages have also been welcomed by the Leyland housebuilder’s founder and managing director Paul Rowley.

He commented: “Every little helps from a housebuilding perspective and costs will undoubtedly be cut for movers who need to spend on household goods. Other good news is the extended three month period before banks can instigate repossession, providing some vital breathing space for homeowners struggling in the current credit crunch. What we need to see now is banks passing on interest rate reductions and not increasing charges to further alleviate financial stress.

“We should start to see some liquidity in the mortgage market by Spring 2009, with Government plans for a detailed scheme to boost lending. Primarily targeted at new mortgages where there is a big issue in the banking sector, securities will be backed by the Government to allow lenders to collateralise their mortgage books. This should help boost the market in the first quarter of the New Year.

“The Chancellor has also pledged action with the creation of The Lending Panel to monitor lending to businesses and households. The lending criteria and charges levied by banks has risen sharply over the past eight months because of liquidity issues, so any pressure the Government can exert has got to be a good thing.”

Small businesses also come up trumps in the bumper pre-budget report, which, says Rowley, is aimed at ‘shortening not avoiding’ the recession and limiting its impact.

The postponement of an increase in corporation tax to 22% in April 2009 is one of the main benefits to small enterprises. The new rule to carry back trading losses for three years up to a capped level of £50,000 will also provide a much needed tax break for struggling fledgling firms.

Commenting on whether the Government could have gone further, Rowley said: “From a business perspective, I’d like to have seen corporation tax losses carried back with a more significant cap – or ideally unlimited, so medium-sized firms also benefit.

“From a consumer point of view, a straight tax cut would have given people more money in their pocket without causing a huge administrative headache. Cutting V.A.T is no small feat for the businesses who have to change fundamental procedures and practices including prices, websites and accounting systems – and then change them back again in 12 months time.

“In summary, the Government is pumping a massive £20 billion into the economy in the next 12 months – but everyone will pay later. The borrowing is a necessary evil in damage limitation, but the devil will be in the detail. For now the philosophy ‘every little helps’ is a positive starting point.”