The Confederation of British Industry is urging the Chancellor to use the Budget to boost the housing market in order to build confidence among businesses and consumers.
Given its social and economic benefits, the CBI argued that housing should form the main plank of this month's Budget. Among its proposals were measures benefitting first- and second-time buyers, support for householders refurbishing homes and for smaller house builders struggling to access finance.
The CBI said the proposals should form part of a fiscally-neutral budget which would shift £2.2 billion from current spending to high-growth areas. This would include £1.25 billion on capital investment – including housing – and £950 million on high-growth business tax measures, such as a 2% cap on the planned increase in business rates and the removal of stamp duty on equity finance for mid-sized companies.
It also proposed that refurbishment of existing homes through tax cuts or subsidies should be encouraged, that the NewBuy mortgage guarantee scheme should be expanded to those with limited or negative equity looking to step up to their second home – and there are currently around 719,000 households in negative equity – and that the housing guarantee scheme should be extended to cover all housing tenures.
John Cridland, CBI director-general, said: “The government must stick to its fiscal plan but now is the time to kick-start confidence. Our measures will provide another boost for the housing market and will benefit first-time buyers, those trapped in negative equity and those looking to refurbish their homes.
“To boost the construction sector, we are calling for 50,000 new affordable homes to be built, incentives for refurbishing empty homes and the housing guarantee scheme to be extended to all types of housing. We must supercharge the NewBuy scheme to allow second-time buyers struggling to get on the next rung of the property ladder.
“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 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.