Budget 2013: 'UK government should build more homes'

IveSeenTheLight

from http://www.bbc.co.uk/news/business-21735280

Boosting homebuilding and infrastructure spending should be the main goal of the forthcoming Budget, according to business lobby groups.

The CBI and the British Chambers of Commerce (BCC) want tens of thousands of new homes to be built to create new jobs and provide affordable homes.

But they say that the government should stick to its plans to cut borrowing.

However, the BCC says that the government should borrow more if there is no growth within six months.

The BCC is advocating a range of measures, including the building of 100,000 new homes, which it says will cost almost £30bn over three years.

John Longworth, director general of the BCC, said: "If within the next six months there is no prospect of growth... you might have to consider actually borrowing more money but you should only do it to fund areas that the market would forgive."
Building confidence
The CBI says £2.2bn should be moved from current spending to "high-growth areas". Some of this money should be used to build 50,000 new affordable homes, which it says would create 75,000 jobs.

The group also wants more investment in roads and infrastructure and a cap on business rates.

The CBI said money could be found from savings within government departments as well as sales of land and property, and insisted there would be no need for further borrowing.

Tax incentives should be provided to encourage the refurbishment of existing properties, the CBI added.

CBI director general John Cridland told the BBC the plan would address a range of problems: "We need Housing Associations to be freed up going forward to build the affordable housing needed.

"If we want nurses and firemen to be able to live in London we need to build these homes. You create construction jobs - and jobs for young people because these are entry-level jobs - and you build confidence."

He said the government should stick to its fiscal plan, but that these measures were also needed to boost the housing market and would benefit first-time buyers, those trapped in negative equity and those looking to refurbish their homes.

Last month, the CBI said that the UK would avoid falling into a so-called triple-dip recession.

The group believes that the UK economy will grow by 0.3% in the first quarter of the year, after the economy shrank in the last quarter of 2012 - the first period in what some feared might be another six months of negative growth.
Spending debate
The suggestions come as the coalition partners continue to debate whether the government's austerity plans are the right course for the current flat economic conditions.

Both Prime Minister David Cameron and his Chancellor, George Osborne, are determined to keep to their plans to rein in spending.

On Monday, the former defence secretary, Liam Fox, a Conservative, called on the government to freeze the level of public spending for five years and spend the money saved on cutting taxes and the deficit.

He wants all public spending frozen - as against the current freeze for Whitehall departmental budgets.

He is also urging an end to the ring-fencing of certain budgets, including the NHS, schools and universal benefits such as the pensioners' winter fuel allowance.

The Liberal Democrat Business Secretary, Vince Cable, is also against ring fencing, although for different reasons.

He told the BBC that protecting some departments intensified the burden on others: "When you have 80% of all government spending that's ring-fenced it means all future pressures then come on things like the army, the police, local government, and skills and universities.

"So... you get a very unbalanced approach to public spending... I think as a long-term approach to government spending, it isn't very sensible."

George Osborne will announce the Budget on 20 March.

IveSeenTheLight

meanwhile.....

Construction output drops in January

http://www.bbc.co.uk/news/business-21711842

IveSeenTheLight

ScottWhiliams wrote: »

It would be very good for everyone if they go ahead with the proposal to encourage house building. Boris J is still pushing for those massive property developments in London. It will be good for employment good for everyone and will add even more downward pressure to house houses. A win win for everyone.

I'm in the process of building and I can tell you, it's getting harder.

The availability of self build mortgages, even with a 50% LTV is extremely limited.

I basically have two companies to choose from and even then, they want a fortune in arrangement fees and high interest rates.

Six months ago, the market was far more competative.

moneyinmypocket

Get building and get lending - will solve a lot of problems

Wookster

This government has followed the economic policies of the last government. They have only changed social policies (welfare, education & NHS).

Their economic policy is about preserving the status quo, not about really changing the size & role of the state or redefining exactly what the state does.

Graham_Devon

Doubt it will be done. It's all too obviously a good thing for the majority. brings jobs, homes, but puts downward pressure on prices which banks and many owners won't like.#

All that will happen at best is that they will "pledge" houses but not actually do anything about it, and will tinker and offer more stimulus for existing stock.

IveSeenTheLight

Graham_Devon wrote: »

Doubt it will be done. It's all too obviously a good thing for the majority. brings jobs, homes, but puts downward pressure on prices which banks and many owners won't like.

Don;t take this the wrong way but the above is a soundbite post.

The report is suggesting that

build 50,000 new affordable homes, which it says would create 75,000 jobs

"high-growth areas"

50,000 ADDITIONAL new homes would be a start, but doubt it would do much in the grand scheme of things.

Look at London where they have on average 7.1% HPI (some areas doble digit IIRC).
50,000 new affordable homes may just calm down some of the HPI rather than be a downward pressure on the prices

IveSeenTheLight

Graham_Devon wrote: »

All that will happen at best is that they will "pledge" houses but not actually do anything about it, and will tinker and offer more stimulus for existing stock.

Sorry, missed this edit.

Your post comes accross (for me anyway) as having an air of resignation.

Would you consider that it is a good opportunity to buy should you have the access to funds?

grizzly1911

Providing it went into "social housing" directly rather than private landlords and private hands then it would probably be a good measure.

Not so sure this constant drive for private buyers only is the only answer to the problem.

tonitarzan

New homes are needed, did anyone read the BBC article today saying that 50,000 new homes are going to be built to meet needs

IveSeenTheLight

grizzly1911 wrote: »

Providing it went into "social housing" directly rather than private landlords and private hands then it would probably be a good measure.

Not so sure this constant drive for private buyers only is the only answer to the problem.

The government doesn't want the responsibility of 'social housing'.

Modern social housing is run by private businesses

So in essence, when the talk about private rentals, it encompasses individual landlords, professional letting companies and social housing companies