The Prime Minister recently announced the doubling of the number of new homes built as part of the ‘Kickstart’ initiative to open up mothballed sites. The reallocation of government money for housing is a clear and welcome recognition of the importance of the need to maintain housing provision and of house building to the economy.
The announcement could be a real boost for potential home owners, the industry and the wider economy, however, ensuring the banks restore some sensible levels of lending is paramount if any boost is to be sustainable.
The wider economic benefits of maintaining supply will equate to an estimated 1.5 jobs created for each unit built.
However, a sustainable recovery in house building that will see employment maintained is dependent upon a restoration of some sensible levels of mortgage lending, and some relaxation of mortgage terms such as loan to value ratios. The government must use the influence it now has with the banks to ensure lending returns quickly.