Builders applaud £5bn building boost
– and surveyors call for build-to-rent tax breaks
4th October 2016

This week’s announcement of a £3billion loan fund to small housebuilders, as part of a £5billion support package to stimulate new home building, was immediately welcomed by the Federation of Master Builders.

Chancellor Philip Hammond and Communities Secretary Sajid Javid unveiled the plans at the Conservative Party Conference, where Javid said the Government had a ‘moral duty’ to tackle the housing crisis.

Brian Berry, Chief Executive of the FMB, said: "We welcome the Government’s renewed focus on house building and its recognition that without a resurgent SME sector, there’s little prospect of the country tackling its chronic under-supply of new homes.

“The launch of a £3 billion Home Builders Fund, a significant part of which will be specifically targeted at supporting small scale developers, will tackle one of the key barriers to SME house builders – a lack of access to finance. One in two local house builders cite difficulty accessing finance as a major barrier to their ability to build more homes, demonstrating the latent potential of a sector that can play a much larger role in tackling the gap between supply and demand of new homes.”

He added that the Government will need to work closely with industry to ensure that this policy is delivered in a way that is accessible and that enables both existing SMEs and new entrants to make maximum use of such a substantial fund: “If the Government get the details of this fund right, we would hope that the anticipated building of 25,500 homes over the course of this Parliament could act as a real catalyst for a much wider revival of SME house builders.”

Meanwhile, the Royal Institute for Chartered Surveyors is forecasting a massive growth in demand for rental properties as house prices become more unaffordable. The organisation wants to see easing of Stamp Duty and tax breaks for pension funds to back rental developments with affordable elements.

The organisation said in a statement: “We urge the Prime Minister to abandon David Cameron’s previous home ownership focus and reverse April’s Stamp Duty measures in order to address short term rental supply issues. However, they are recommending that Government takes a much bolder long-term approach and pioneers a new build-to-rent sector, with the private sector encouraged to build properties specifically for residential letting. It would like to see pension funds incentivised with tax breaks to build large scale rental properties with affordable elements. Additionally, local authorities holding brownfields sites should be encouraged to release land for such properties.”