George Osborne revealed a £500m “Builders’ Finance Fund”, which will offer loans to small developers and help sites of up to 250 homes that have been stalled due to lack of funds.
The initiative is aimed at easing the growing housing crisis in Britain, by improving smaller house builders access to finance.
Estimates shown that the fund will unlock 15,000 housing units stalled due to difficulty in accessing finance.
The chancellor stated that the Government would also back three vast housing schemes: a garden city at Ebbsfleet, and schemes at Barking and Brent Cross to boost the housing construction in Britain.
The announcement was widely welcomed by the Federation of Master Builders, as “many major banks are still reluctant to lend for small residential developments”.
However there was some concern that the coalition’s policy would be primarily aimed at sites that had already been bought and acquired planning permission, while many SMEs can’t afford to buy land in the first place.
According to the chancellor, the first part of the Help To Buy scheme, which offers buyers a loan of 20 per cent of the value of a new home, would be extended until 2020, and the government would look at making the Help to Buy scheme available on custom build projects.
“That would make a serious difference to us,” said Mr Midgley of Fairgrove, which plans to sell 30-40 homes this year. “I could sell an extra 10 houses on that.”
Osborne added that the second element of Help to Buy, the mortgage guarantee for buyers, will be extended until 2016.
“Taken all together, the housing policies I announce today will support over 200,000 new homes for families. We’re getting Britain building.”
However the figure still falls short of the estimated 240,000 homes that experts believe are needed each year to keep up with population increase in the UK.
The Labour party had previously supported the “Help to Build” policy, which would offer guarantees to banks lending to small and medium-sized builders, and which was expected to create 10,000 construction jobs and 200,000 homes a year by 2020.
Photo: The Guadian