Action to restore mortgage lending and cash to unlock land imperative MPs were today told that the Government had been far too slow to react to the housing crisis and that drastic action was needed to reverse the dramatic downturn in the housing market before more jobs were lost. And whilst welcoming Government action taken so far, including yesterdays Homebuy Direct announcement, John Stewart, HBF’s Director of Economic Affairs said that Government action had been consistently too slow in arriving and nowhere near comprehensive enough. HBF made a series of suggestions to Government in early 2008 and only now, after many businesses have failed and jobs been lost, are significant steps being taken – and they are still not enough. Speaking at the Communities and Local Government select committee inquiry in to housing and the credit crunch, John Stewart told MPs that the significance of the housing market to the wider economy meant it was imperative that the Government acted. HBF believes that; • Restoring mortgage availability is key - and after waiting so long for Sir James Crosby’s report, the Government must now act on his recommendations and not wait until next year’s Budget as was suggested in the Chancellor’s desperately disappointing reference to this in the PBR. • The Government must challenge lender behaviour and use the influence it now has in the banking sector to insist some sensible lending - both to home buyers and struggling businesses - returns, as was promised by the Chancellor when the package to inject cash into the banks was announced in the Autumn. • Government urgently needs to reallocate a significant part of its housing budget – that will not now be spent as planned because of the current downturn - to buy both empty new homes, and to unlock sites on which development could start immediately with an injection of up-front public money and be developed using public private partnership agreements. Money allocated so far has been welcome – but not nearly enough. Mr Stewart said today “We have been warning Government for many months that it needs to act and the action taken, whilst welcome, has been far too slow. They have lacked urgency. We need much more to be done now, as every day it fails to act sees more industry capacity lost, more jobs lost and more businesses disappearing. He went on, “Crosby must be acted on now. He was commissioned in the budget and now they are talking about waiting til the next budget to act. They have waited and waited again when urgency is needed. - Ends - Notes to Editors: 1. The Home Builders Federation (HBF) is the principal representative body for private sector home builders and voice of the home building industry in England and Wales. The HBF’s 300 member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk 2. The Government has announced a number of measures to assist the housing market, including at least £300m of Housing Corporation money to buy empty housing stock from private developers for the public sector, and yesterday’s very welcome announcement of £450M to deliver affordable units. The Housing Corporation has a budget of £8.4Bn for the three year period 2008-11. Affordable housing delivery is now largely reliant upon a functioning private housing market as the majority of such housing is delivered through Section 106 agreements on private housing sites. With private housing output significantly down because of the lack of mortgage availability, the number of affordable homes will similarly decline, necessitating a reallocation of budgeted monies. 3. There are a number of measures Government could take to incentivise private investment in the residential sector, including reforming stamp duty rules; creating a more efficient tax vehicle for investors and allowing SIPPS to invest in residential property. For media enquiries, or to arrange an interview, please contact Steve Turner 020 7960 1606 07919 307 760 steve.turner@hbf.co.uk
