PROPERTY: Budget response from the Federation of Master Builders

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The Government has today (Wednesday) taken positive steps to address the housing crisis, but the measures announced may not go far enough to allow smaller builders to deliver the energy-efficient new homes Britain so badly needs, warns the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, says: “We needed a ‘Budget for Housing’ to address the acute shortage of affordable, energy-efficient homes in the UK. The Help to Buy package is aimed at stimulating the underperforming mortgage market, which could provide a boost to all firms involved in house building, renovation and repair. But changes to the FirstBuy scheme will be of limited assistance if it remains too costly and complex for smaller developers, who deliver a third of all new homes.

“Britain’s SME builders are in need of relief after years of shrinking workloads and rising costs. More than three-quarters of our members recently told us that the most important thing the Government could do to revitalise the home repair, maintenance and energy-efficiency markets would be to cut VAT. This would also provide a level playing field when competing with builders who choose to avoid charging VAT.”

Mr Berry adds: “Small builders have so far seen little benefit from the Funding for Lending scheme, as a quarter of our members tell us they are having to turn down work as they still can’t secure vital financial backing from lenders to buy plant or hire staff. Unless it starts functioning properly, and as long as lenders continue to discriminate against those in the construction industry, our members will be unable to provide the jobs and output the Coalition needs private enterprise to deliver.”

“The Chancellor clearly understands the benefits that increased capital investment can bring for the wider economy. However, when seeking to stimulate construction and housing he must pay particular attention to the central importance of smaller, local firms in delivering growth.”

“If Ministers want an industry-wide boost to jobs and growth while delivering desperately needed new homes and meeting energy-efficiency targets, we need bolder measures such as cutting VAT on domestic repair and maintenance work, and reducing the regulatory burden which discourages so many small developers from even contemplating building new homes.”