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Monday, 21 November 2011

CBI Conference Today - Prime Minister announces £400m for housebuilding

With the backdrop of falling stockmarkets, low growth, budget deficits and restless populations in the Eurozone, US and the Middle East, the CBI conference has much to talk about!

Basically, the government needs to be seen to be promoting growth and David Cameron has just unveiled a £400m fund to "unblock" housing projects that are "shovel ready" but have been unable to go ahead because of a lack of funding.  The plan is  they can provide jobs, growth, and affordable housing. So an ambitious plan then.  £400m though, is pretty small in the grand scheme of things.  Many builders have gone into administration as they have been unable to complete projects or margins have been squeezed.  However, such a scheme does run the risk of throwing good money after bad.  Many would prefer to see old stock renovated or house prices just coming down in value to make them affordable. 

The government has also pledged to underwrite the risk of owning a home by offering to underwrite potential losses on a proportion of mortgages.  The government's record on these sort of schemes has been patchy as takeup has been slow or processing them has been buried under red tape but we will see how this works.

Blogged by Robert Moore of KSA Group

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