The HBF today expressed its disappointment that the Chancellor did not go further in his Pre Budget Report to assist the nationally vital housing industry. Whilst cautiously welcoming the Chancellor’s commitment to free up mortgage lending, the Government has failed to heed the industry’s call for a significant increase in investment to help bring forward much needed new housing delivery. The HBF believes that the commitment by Darling to act on the recommendations made by Sir James Crosby in his report on mortgage provision is crucial, but warned that action is needed quickly as without an increase in mortgage lending any housing market recovery will be impeded. And whilst appreciating the need to abide by EU regulations, the Government must use the influence it now has with the banks to insist upon immediate lending increases in the light of the banking support measures already taken. HBF welcomes the establishment of a ‘Lending Panel’. It believes it is critical to monitor mortgage lending so that the Government can take necessary action should it be required. Bringing forward the investment of significant amounts of planned housing expenditure is also something the HBF has been calling for. The additional £150m identified today to support the delivery of new social housing whilst welcome is painfully inadequate in today’s circumstances. Much more investment needs to be brought forward both to purchase available stock and to ‘pump prime’ new sites with up-front cash to help builders commence new projects as a matter of urgency. An additional investment of £150m at this stage will not have significant impact against an estimated shortfall in housing provision this year alone of around 100,000 new homes. Significantly more money will be needed if we are to meet housing needs. We doubt the Housing Corporations budget of £8.4bn can be spent as planned in the current climate and a serious reallocation was desperately needed. Without a much greater reallocation of investment the risk is that affordable housing output as well as new supply generally will drop dramatically in the coming months with a consequent loss of house building industry capacity, essential for future housing provision. The HBF has also been calling for additional measures, such as an extension of the stamp duty holiday for properties up to £1m, a reintroduction of MIRAS and allowing SIPPS to invest in residential property, and will continue to lobby Government for continued and coordinated additional action. Stewart Baseley, Executive Chairman of the HBF said today, “The housing market is absolutely critical to the wider economy, and we have been saying for months now that urgent action to assist it is required. Unfortunately the Chancellor does not seem to have drawn the same conclusion and today’s measures will do little to boost a depressed market. Today’s announcement on freeing up mortgage lending must be welcomed, but the Government needs to act fast and implement its proposals quickly if the benefits are to be felt by the wider economy, jobs are to be protected and housing supply is to recover . The money allocated today to start building projects is seriously disappointing, and will do too little to assist.” - 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. 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 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
