The Federation of Master Builders has told government that allowing councils to borrow to build homes could help tackle the housing crisis.
With chancellor Philip Hammond’s first Autumn Statement only a fortnight away, the Federation of Master Builders chief executive Brian Berry has urged “the new Chancellor to think creatively about how to address the country’s growing housing crisis”.
Although Berry acknowledged that the “government clearly recognises the extent of the housing crisis”, he stressed that “the gap between the number of homes we are building and the 250,000 a year figure widely accepted to be necessary in order to address the housing shortfall remains significant”.
Berry suggested that a possible solution to the crisis would be allowing councils to borrow in order to build new homes.
“Local authorities, who are well placed to identify local housing needs, can play a critical role in financing an increase in housing output in a safe and sensible way.
“We currently spend £1 on house building for roughly every £4 spent on housing benefit. Investing in a longer term solution would therefore make sense even in more certain economic conditions.”
As well as saying that empowering councils to borrow could mitigate the housing crisis, Berry added that it could provide “a welcome shot in the arm to a sector that is still jittery over its prospects for the next few years”.
Berry concluded: “The chancellor has spoken of a fiscal ‘reset’ ahead of his statement. In this spirit, we hope he seriously considers a policy that would both act as a simple low-risk stimulus and would help the government achieve its housing targets.”