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Government urged to extend housing guarantees programme as construction recovery plan published
An extension of the loan guarantee scheme to support the delivery of affordable and private sector homes is one of a raft of measures being proposed by the Construction Leadership Council (CLC) in its new ‘Roadmap to Recovery’ aimed at boosting construction once the coronavirus crisis ends.
Released today, the CLC’s proposals include a call on the government to “commit the remaining £4bn [left in the guarantee scheme] and consider adding further commitments to the 2017 housing guarantees programme to support social housing, build-to-rent and SME housing delivery”.
The document is referring to the £8bn loan guarantee scheme announced by former chancellor Philip Hammond during the Autumn Budget in 2017.
In 2019, Mr Hammond announced £3bn would be used for an Affordable Homes Guarantee Scheme, which is aimed at supporting the delivery of around 30,000 homes.
Housing associations and private house builders which borrow through loan guarantee schemes are typically able to do so at lower interest rates due to government backing.
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The proposal is one of a series of measures published as part of the CLC’s three-stage plan to help the construction sector recover from the downturn caused by the coronavirus lockdown.
Other proposals include calls on the government to delay the implementation of reverse charge VAT until October 2021 and extend its Help to Buy scheme.
Meanwhile, public sector clients are being urged to publish revised pipelines for infrastructure projects and consider allowing extensions of time or increased budgets where necessary to cover unavoidable delays and cost increases.
The three phases of the CLC’s plan – restart, reset and reinvent – are to be delivered over a period of two years, with longer-term proposals including a shift to offsite manufacturing and the embedding of net-zero carbon 2030 to 2050 targets.
The construction sector has been heavily hit by the coronavirus crisis, with the majority of sites closing completely for a period in March and April.
While many sites have now reopened, they have done so at limited capacity due to strict social distancing measures.
Earlier this month, Wates became the first major contractor to announce large-scale redundancies in response to the pandemic as it revealed it would be cutting approximately 300 jobs.
