Labour will give small companies backing to build homes

Today, Labour’s Shadow Housing Minister, Emma Reynolds, and Shadow Chief Secretary to the Treasury, Chris Leslie will explain how Labour would address the housing shortage in the UK.

The plans that have emerged from the Lyons Housing Commission – which will be published in full in September –  focus on giving small-builders better access to finance, in turn increasing the amount of homes they can build.

Reynolds and Leslie will today argue that during and after the 2008 bank lending to Small and Medium Enterprises (SMEs), including small-sized construction companies, more-or-less came to a standstill. The number of homes registered by companies building less that 500 units a year has dropped from 66% in 1988 to 27% in 2013.

To address this, and help to meet the target set by Ed Miliband that 200,000 would be built by 2020 this proposal, dubbed the Help to Build scheme, would give government guarantees for bank lending to SME construction firms.

Leslie has explained how and why this related to the government’s current scheme:

“Most people recognise that balancing supply and demand is the solution to tackling affordability – most, that is, except the Chancellor of the Exchequer. While the Help to Buy underwriting scheme may increase access to mortgages, what we now need is to use the strength of government guarantees to help increase the supply of affordable properties. Labour’s Help to Build scheme will encourage small house-builders to deliver more homes, as well as stimulating the local economy and helping to prevent prices from spiralling ever further out of reach for young homebuyers.”

And Reynolds has stressed just how dire the current situation is:

“ Under David Cameron, house-building has fallen to its lowest level in peacetime since the 1920s. We need a more diverse and competitive housing market to build the homes we need but in recent years small builders have fallen into decline. Through our Help to Build scheme, Labour can boost small builders, increase house building and help make home ownership a realistic aspiration for the next generation.””