The government should pump £1.25bn into Britain's ailing housing sector in order to turbo-charge an economic recovery by creating 75,000 jobs and generating £18bn within the wider economy, the Confederation of British Industry (CBI) has suggested.
With the Budget just days away, the business lobby group has urged the Chancellor to put housing at the centre of his economic plans. Among its proposals are measures benefitting first and second-time buyers, and support for householders refurbishing homes and for smaller house builders struggling to access finance.
The CBI says the proposals should form part of a fiscally-neutral Budget which would shift £2.2bn from current spending to high-growth areas.
To boost the sector, the CBI's director general John Cridland called for 50,000 new affordable homes to be built, incentives for refurbishing empty homes and for 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,' said Cridland.
The CBI also called 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.
And it suggested that tax cuts or subsidies should be made available for renovation and repair work which it says has the potential to create 80,000 jobs at a cost of no more than £500m, also bringing empty homes back into use.
Other housing measures include accelerating public sector land release for new housing on a 'build now, pay later' terms by moving all responsibility to the Homes and Communities Agency and introducing a housing deposit ISA to encourage saving. It also wants to see the government, extend the housing guarantee scheme to cover all housing tenures to support smaller house builders access finance.
Capping business rates at 2% - instead of pressing ahead with the planned rise to 2.6% in 2013 - at a cost of £140m, would help safeguard jobs on the high street and freezing Air Passenger Duty (APD) at a cost of £50m, the CBI recommended further.