THE Labour Party’s proposal for a ‘Help to Build’ guarantee scheme to improve access to finance for small and medium-sized house builders has been given the thumbs up from the Federation of Master Builders (FMB).
The FMB says it would provide a welcome boost to help increase the supply of new housing, and they are right. This needs to sit alongside a major investment in a new generation council housing.
The obscene expenditure subsidising private landlords through housing benefit each year should be used to build houses instead. Currently £9.5 billion of the total £24 billion annual housing benefit bill goes to private landlords.
We need a mixed approach to housing provision that would generate much needed skilled jobs and give a boost to the construction supply chain. If we are going to tackle the nation’s housing crisis we need the public and private sectors working in harmony to provide good quality affordable homes to rent and buy.
This government’s obsession with ‘selling off the family silver’ through the heavily discounted right to buy will only make the housing crisis worse. I agree with the FMB’s Chief Executive, Brian Berry, who said: “To provide the number of new homes we need in this country, both builders and buyers need access to finance.” The problem is the present government’s ‘Help to Buy’ scheme is increasing accessing to finance but is doing little to increase supply, which is creating another house price bubble.
The SME house building sector used to deliver around two thirds of all new homes but it now only delivers less than one third. Furthermore, the number of firms in the market has plummeted over the past five years, further reducing the industry’s capacity. As Brian Berry points out: “Without access to finance on reasonable terms, SME house builders will remain hamstrung in their ability to increase the supply of new homes.”
The chancellor could use the budget to boost the supply of affordable housing and assist SME house builders. I just hope he’s listening.
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