CBI makes rallying call for investment in construction

The director general of the CBI has called on government to invest in housing and construction, describing this as a “game-changer” for economic growth.

In a speech to the CBI North-East annual dinner last night (Thursday), John Cridland said chancellor George Osborne should use his autumn statement at the end of November to help first-time buyers, people who want to move up the property ladder, and the construction industry.

He said: “Bolstering infrastructure spending investment on transport, power stations and housing is one of the biggest and most effective levers the government has to pull. It will help unlock some of the £60 billion of potential investment currently on company balance sheets and could create new jobs into the bargain.”

“Now is the time to stop the stagnation and get the housing market flowing again. The CBI wants to see a revitalised mortgage Indemnity Guarantee, to reduce the risk of higher loan to value mortgages. One way this could be done would be through a deal between mortgage providers and housebuilders. There could also be a role for government to step in with some very focused support to bridge the gap.”

Cridland also called for a new model of shared ownership to be developed and for first-time buyers to be helped by giving them access to savings within their pensions through a loan-back scheme.

He lamented the fact that the average age of first-time buyers is expected to climb from 37 to 43 as people struggle to raise deposits.

“Owning a home has been a natural aspiration for generations of Britons since the 1950s,” he added. “It has never been easy but after this recession, the high cost of property, strict lending rules and the need to save substantial deposits has put home ownership out of reach for all but the lucky few.”