The much hoped for cut in VAT on private housing repair and maintenance failed to materialise in today’s budget but chancellor Alastair Darling announced some measures to help the housing industry.

While the Get Britain Campaign’s hopes for a VAT cut from 15% to 5% were dashed, the chancellor announced an £80m extension to the shared equity mortgage scheme to help first time buyers get on the housing ladder, £500m to help kickstart stalled housing projects and £100m for local authorities to build energy efficient housing.

The package was described as timid and a drop in the ocean by the Federation of Master Builders (FMB), which said the chancellor had failed to take decisive action to help the construction industry.

“The Chancellor has missed a golden opportunity to help build Britain out of the recession,” said Brian Berry, FMB external affairs director. “A £5 billion package would have created 55,000 new jobs as well as help increase the supply of much needed homes. A cut in VAT to five percent would have helped to bring the 300,000 empty homes back into use. Instead the Chancellor has let the opportunity slip by and those wanting an affordable home will be forced to wait even longer.”

Construction Products Association chief executive Michael Ankers welcomed additional measures to stimulate the private housing market and a top-up scheme to support credit insurance, but said there was little else to comfort the industry facing a 12% decline in output. He said the construction industry’s united call for a VAT reduction on domestic repair and maintenance work had been ignored.

“This really is a missed opportunity, particularly given the very strong encouragement last month to member states from the European council to take this step.”

The stamp duty freeze on house purchases up to £175,000 was also extended to the end of the year

The chancellor committed the government to cutting carbon emissions 34% by 2020, while £435m of extra support was promised for energy efficiency measures in housing.

He also promised not to cut investment in public services, with education sector investment to increase by 4%.

Measures to help with credit insurance will be welcomed by the timber and building sectors, but the price of petrol will increase by 2p per litre from September.

From January next year, the long-term unemployed will be offered a job or a place in training, thanks to to an additional £1.7bn employment support.

The government’s budget deficit will hit £175bn in 2009/10 and £173bn the following year. A total of £9bn of savings will be made through efficiency savings by 2013/14.

(more on the budget and response from the timber sector will follow)