Business leaders have called on government to fund 50,000 new affordable homes in the upcoming budget
The Confederation of British Industry has set out a range of proposals as part of a ‘fiscally-neutral budget’, transferring £2.2 billion from spending to high-growth areas.
Intended to ‘kick-start confidence’ and boost construction, the proposals include a £1.25 billion investment in capital projects and housing and a VAT reduction for refurbishments. Extending the NewBuy scheme to include second-time buyers was also mooted.
CBI director-general John Cridland said: ‘With its relatively short lead-in times, house building offers the most bang-for-buck in growth terms - unleashing pent-up demand, while creating jobs and growth.
‘To boost the construction sector, we are calling for 50,000 new affordable homes to be built, incentives for refurbishing empty homes and the housing guarantee scheme to be extended to all types of housing.’
The announcement comes shortly after the RIBA demanded urgent measures to ‘get UK building in order’ – including funding for 300,000 new homes every year.
Housebuilding remains sluggish with seasonally adjusted December starts 45 per cent below March 2007’s peak.
Building Centre managing director Colin Tweedy said: ‘We need to see the Chancellor signalling to our industry that building new homes is critical to our future and that Mr Osborne will announce a major new capital investment programme to kick-start construction.’
Chris Williamson of Weston Williamson proposed launching a ‘National Housebuilding Council’ to formulate a ‘five year plan’ for the disposal of publicly owned land.
Beyond housing, ADP chair Roger FitzGerald called for a fresh wave of investment in universities.
He said: This initiative would stimulate the economy, particularly construction, in the short term through the creation of capital projects.
‘It would create real opportunities for recent graduates - talented and trained young people currently not being utilised to anywhere near their potential - and it is essential for the longer term, to keep the UK ahead in innovation and cutting-edge new technologies.’
The chancellor will deliver his budget to the House of Commons on Wednesday 20 March.
Budget 2013: CBI housing proposals
- Fund a further 50,000 affordable homes directly by injecting £1.25 billion of capital investment through the Affordable Homes Programme, generating £18 billion within the wider economy and creating 75,000 jobs
- Encourage refurbishment of existing houses though tax cuts or subsidies on renovation and repair work. This has the potential to create 80,000 jobs at a cost of no more than £500m, and would bring empty homes back into use
- Accelerate public sector land release for new housing on “build now, pay later” terms by moving all responsibility to the Homes and Communities Agency
- Review measures to increase institutional investment to encourage pension funds to invest in housing
- Explore expanding the NewBuy mortgage guarantee scheme to those with limited or negative equity looking to step-up to their second home, making more properties available for first-time buyers
- Introduce a housing deposit ISA to encourage saving. Combined with proactive marketing of the FirstBuy and NewBuy Government schemes, this would help overcome the perception among first-time buyers that they are unable to get a foot on the housing ladder
- Extend the housing guarantee scheme to cover all housing tenures to support smaller house builders access finance.