PM unveils housing plans

Prime Minister Gordon Brown has revealed his policy plans for the next year, with housing high on the agenda.

The proposals include delivering 110,000 affordable homes by 2011 and changes to council house allocation rules which may give more preference to local residents.

The Home Builders Federation (HBF) welcomed the move by the Prime Minister which includes a doubling of the number of new homes built as part of the Kickstart initiative to open up mothballed sites.

It said 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 wider economic benefits of maintaining supply are quite clear, with an estimated 1.5 jobs created for each unit built.

However, it warned 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 HBF said the Government must use the influence it now has with the banks to ensure lending returns quickly.

Stewart Baseley, executive chairman of the HBF, said: “The announcement is welcome and could be a real boost for potential homeowners, the industry and the wider economy, and we must all now work to ensure this money is allocated as quickly as possible. However, ensuring the banks restore some sensible levels of lending is paramount if any boost is to be sustainable.”