Builders warn housing spurt may be scuppered by end of Help to Buy

Chancellor pressed to clarify strategy beyond 2016 amid forecasts of sharp housing slowdown

A leading construction industry body today voiced concerns over a recovery in housebuilding being all but extinguished when the Chancellor’s Help to Buy scheme to support the market ends in 2016.

The Construction Products Association also called for clarity from the Government of the future of the initiative as its latest forecasts predicted a sharp slowdown in new housing to just 2 per cent in 2016 – when Help to Buy is due to finish – following double-digit growth this year and next.

The association forecasts the overall construction sector, which accounts for around 6 per cent of the economy, will see annual growth speed up to 3.4 per cent this year – the best since 2010. The pace increases to 5.2 per cent in 2015, helped by major projects including Crossrail and the construction of the UK’s first new nuclear power station in a generation at Hinkley Point in Somerset.

But growth in private housing work is set to slow rapidly after Help to Buy, according to the body’s economics director Noble Francis. Since April last year the Chancellor’s Budget centrepiece was government loans of up to 20 per cent on new builds, funded by a £3.5bn pot to underwrite an estimated 75,000 purchases.

As of December, there were 18,000 reservations since April under the first stage of the scheme. “After 2015, without Help to Buy to support housing market demand, there are strong concerns about whether house building will continue to improve despite the clear need for new housing,” Dr Francis said.

Private housing starts in Britain declined more than 7 per cent to to just 94,000 in 2012, 35 per cent below the average of the last 20 years. By 2017 the association’s forecasts suggest 153,000 private housing starts and 30,000 public starts – only three-quarters of the 240,000 homes needed to meet the number of households created each year, according to the Office for National Statistics.

Dr Francis added: “2016 is a very big issue for the housing market. I think that for the housebuilders and the wider industry as well as mortgage lenders everybody would benefit if there was greater clarity for the medium term.”

The Bank of England, which is opposed to any extension of the scheme, is monitoring Help to Buy and can make recommendations to halt it if it judges risks to financial stability are growing. The Bank has already stopped banks from using its Funding for Lending scheme to access cheap cash to fund mortgage loans.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
Life and Style
Life and Style
Customers look at the new iPhones on display at the launch of the new Apple iPhone 6 and iphone 6 plus at the Apple IFC store in Hong Kong
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Sport
Andros Townsend is challenged by Vladimir Volkov
football
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week