Monday
21st November 2011 –FOR IMMEDIATE RELEASE
The Government’s new
housing strategy is far from radical and only makes a small step in tackling
the worst housing crisis we have seen for many years, says the Federation of
Master Builders (FMB) in response to the Government’s Housing White Paper.
In particular, it does little to help small and medium sized (SME) house
builders who have the potential to deliver the homes that are required if the
right policies and incentives were put in place.
Brian Berry, FMB Director
of External Affairs said:
“The scale of the housing
problem is now so enormous that we need to increase the supply of new homes by
at least 500,000, the equivalent size of Birmingham, by 2015, if we are to meet
rising demand. If the Government was seriously committed to increasing the
supply it would reintroduce housing targets for communities that failed in
their obligation to meet local demand.”
Berry continued:
“The Government’s proposed
mortgage indemnity insurance scheme is a welcome step as availability of
mortgage finance is a key issue killing off housing demand. Typically a
mortgage now requires a 20%-25% deposit with the result that the average first
time buyer is now aged 37. Last year only 15% of mortgages required a 10%
deposit as compared to 40% before 2008.
Berry continued
“The Government has
committed to reducing the burdens on the house building sector over the
lifetime of the parliament but it is continuing with expensive and complicated
policies conceived by the last government during the housing boom. The
Community Infrastructure Levy which would add £6,370 to the cost of an average
sized house, and the zero carbon policy which significantly gold plates EU
standards will add around £10,000 to the build cost of a home.”
Berry continued:
“The rising cost of
building new homes that people want to live in is also a key issue and impacts
on the Government’s localism agenda. In the late 1980s SME house builders built
around two thirds of our nation’s housing but now they only build about a
third. Since then the number of SME house builders has decreased by 69% and annual
housing delivery has roughly halved. If the Government wants people to have
choice about the types of homes built in their communities then help for SME
house builders has to be a major part of the housing solution. Research from
the London School of Economics (LSE) last year suggests that there are
sufficient micro sites within our existing towns and cities to satisfy our
housing need. However, to exploit these, a healthy SME house building sector is
required. The problem is that our research also shows that these sites are
around 70% more expensive to build on than larger developments.”
Berry concluded:
“We shouldn’t forget that
there are over 700,000 empty homes in England that could be brought back
into use. Cutting the rate of VAT from 20% to 5% would help boost the
renovation of these properties and help increase the housing supply within a
very short time.”
