RICS Call for Government to Boost Funds for UK Housing Market

Ahead of next week's Budget statement, the Royal Institution of Chartered Surveyors (RICS) has called on the Government to deliver the funds needed to boost the UK's housing market and provide the infrastructure that the country needs.

The trade body highlighted that in December's Autumn Statement, George Osborne reaffirmed a pledge to boost construction and housing transactions across the UK, though initiatives which the Chancellor mentioned, such as the Regional Growth Fund and Get Britain Building, are yet to bear any perceptible fruit.

RICS has suggested that insufficient capital is getting through to developers and contractors, and has intimated concerns that unless funds are released more quickly, the construction sector will continue to stagnate.

Furthermore, the Institution has suggested that an increase in development projects would increase housing stock, create jobs and deliver growth across the country.

In addition, the government's Funding for Lending scheme – designed to allow buyers to borrow at affordable levels – was reported to be 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.

RICS has called for the following points to be addressed in the coming Budget:

  • 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 builds will come into effect - RICS claims that this is desperately needed on the high street, 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; and
  • A commitment to visibly promote public sector construction contracts, meaning that more small firms across the UK are aware of projects and able to directly bid for work.

Simon Rubinsohn, Chief Economist at RICS, said: "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 £2.80 of benefits to the wider economy, and if the UK is to work its way out of the economic slump, on-going investment in construction will be crucial."

He added: "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."

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Andrew Eagle has worked in the Finance Industry for over 26 years, currently specialising in bridging loans. He regularly contributes to blogs on bridging finance. Find him on Google +

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