Think-tank urges £100bn borrowing over decade for up to 75,000 more homes a year
Government should borrow £100 billion over 10 years for a National Housing Fund to enable the construction of up to 75,000 more homes a year, an independent think-tank has proposed.
The plan set out by ResPublica envisages the new homes being rented out by housing associations to would-be house-purchasers who cannot afford the deposits needed to buy.
After five years, the homes could be offered to tenants for sale, with possible subsidies for key groups like nurses, teachers and police officers.
ResPublica director Philip Blond said the fund would encourage private developers to expand the size of residential construction projects by assuring them of a guaranteed buyer for new homes.
The scheme - similar to those which drove a wave of house-building in the 1950s and 1960s - could add 0.4% to GDP and provide £2.4 billion of tax receipts each year, as well as supporting 200,000 jobs, he said.
Funding could be raised by the Treasury issuing long-term low-interest gilts.
Mr Blond said: "The idea of giving people help to buy homes can only work to its full potential if there is a ready supply of properties on the market.
"For too many years, successive governments have failed to build enough homes, or enable enough homes to be built.
"This must change if we are going to address a problem which is creating a divide in society between those who can afford to enter the property market and those who are priced out - the haves and have-nots.
"Our National Housing Fund offers the British Government a way to finally build the homes it acknowledges it needs.
"Through the notion of a guaranteed buyer, we reinvent the only formula that has ever enabled the state to build at scale.
"Crucially, we will dramatically expand the capacity of two relatively dormant sectors - the SME building market and housing associations - such that they too can build at scale and open up the market for the millions who need it to work for them."