Ahead of next week’s Budget statement, RICS has today prompted the government to act on its promises and deliver the funds needed to boost the housing market and provide the infrastructure that the UK badly needs.
In December’s Autumn Statement, the Chancellor reaffirmed his promise to boost construction and housing transactions across the UK. Initiatives such as the Regional Growth Fund and, in particular, Get Britain Building are yet to bare fruit.
It seems that insufficient capital is getting through to developers and contractors, and RICS is concerned that unless funds are released more quickly, the construction sector will continue to stagnate. An increase in development projects would increase housing stock, create jobs and deliver growth across the country.
Furthermore, the government’s Funding for Lending scheme – designed to allow buyers to borrow at affordable levels – is already having an impact on the market, and RICS is confident that a further release of funds could assist more would-be homeowners and small businesses and prevent prolonged market stagnation.
In the forthcoming Budget RICS would also like to see:
- A greater investment in maintenance of existing infrastructure such as roads and rail. This can deliver growth more quickly than large scale infrastructure projects such as HS2.
- A concrete plan as to how central funding for Local Enterprise Partnerships (LEPs) is to be allocated, as recommended in the Heseltine Review, to promote swifter growth at a regional level.
- Clarification as to when Empty Property Rate (EPR) exemption for new build will come into effect. This is desperately needed on our high streets where less development is happening and rents are being pushed up.
- Greater clarity from government as to where and how businesses can apply for financial support. Access to finance is key for property and construction businesses to speculatively develop.
- A commitment to visibly promote public sector construction contracts, meaning that more smaller firms across the UK are aware of projects and able to directly bid for work.
Simon Rubinsohn, RICS Chief Economist, commented: “The mantra now must be deliver at all costs. We have seen promises of funding and cheaper borrowing from the government but we now need to see evidence that it’s actually getting through to the firms and projects that need it. Every pound invested in construction provides around two pounds eighty of benefits to the wider economy, and if the UK is to work its way out of the economic slump, ongoing investment in construction will be crucial.
“It has been encouraging to see the increase in activity taking place in the housing market since the Funding for Lending scheme was announced. The government should take heart with this and free up more capital to give the market the shot in the arm that it needs by allowing would-be homebuyers and small businesses to enter the market.”
