Business bosses call for radical housing boost in Budget

Aaron Morby 11 years ago
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Britain’s business leaders are calling on the Chancellor to get more bang for his buck in the next Budget with a big boost for housing.

The CBI said housing should form the main plank of this month’s Budget to bump-start the economy.

Its wants to see an extra 50,000 affordable homes, fresh measures to help first and second-time buyers and VAT cuts to help householders refurbishing homes.

Leaders also want help for smaller house builders which are struggling to access finance.

The CBI’s track record for calling the direction of Osborne’s Budgets has been very good of late. Up until now its focus, like the Government’s, has been heavily weighted to transport and energy infrastructure.

John Cridland, CBI Director-General, 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.”

The CBI says the proposals should form part of a fiscally-neutral Budget, which would shift £2.2bn from current spending to high-growth areas.

This would include £1.25bn on capital investment – including housing – and £950m on high-growth business tax measures.

He said: “We must supercharge the NewBuy scheme to allow second-time buyers struggling to get on the next rung of the property ladder.

The CBI is also calling on the Government to bring forward its road spending and repair programme, as well as strengthening support for exporters and for smaller firms struggling to access finance.

This comes as rumours spread that the Free Schools Budget is up for the chop and several more road schemes will be accelerated along. These are thought to include: A303 Stonehenge Bypass, A30 over Bodmin Moor, Upgrading A47 across Norfolk to motorway and the upgrade of a 20-mile section of A14

CBI’s housing proposals

  • Fund a further 50,000 affordable homes directly by injecting £1.25bn of capital investment through the Affordable Homes Programme. This would generate £18bn within the wider economy and creating 75,000 jobs
  • Encourage refurbishment of existing houses through VAT cuts or subsidies on renovation and repair work. This could 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. This would make 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.

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