Budget offers crutch but no cure for builders

By Lorraine Turner and Sinead Cruise

LONDON (Reuters) - Moves to stimulate the moribund house-building sector in the budget may help keep struggling builders afloat but will do little to reinvigorate a property market where lending remains scarce.

Chancellor Alistair Darling unveiled on Wednesday a 1 billion pound package that includes measures he hopes will lead to the reopening of mothballed building sites.

"The commitment ... to underpin upfront infrastructure on large sites is a significant positive," Chief Executive Pete Redfern at Taylor Wimpey said.

"Fresh investment will be key to avoid UK new housing volumes languishing in the 70-80,000 range for the foreseeable future."

However, shares in UK housebuilders were little moved by the news in Darling's second annual budget.

"Its probably on first glance, perceived (by the markets) as a damp squib," said Florence O'Donoghue, equities analyst at Davy Research.

Darling's budget measures include funding to refurbish both social housing schemes and accommodation for members of the armed forces and the construction of new, greener housing.

Shares in debt-laden housebuilder Taylor Wimpey closed up 0.5 percent while rival Bovis Homes added 2.7 percent and Persimmon ended up 4.1 percent.