With only just over a week to go before the 2013 budget, lobbyists are still pressuring the government over their plans to support affordable housing in the UK over the coming year.
Both the CBI and British Chambers of Commerce (BCC) have been pushing for a clear commitment to build between 50-100,000 new homes over the next 3 years. Clearly new affordable homes do not come without significant cos, so where is the money going to come from?
The CBI says their estimates of £1.25 billion for 50,000 affordable homes could be found from current spending, from savings within government departments and further sales of land and property plus additional funds from the wider economy.
The BCC estimates the spend needed would be £30 billion to ensure 100,000 new homes over the next 3 years but without growth in the affordable housing sector over the next six months, it may be necessary to borrow more to build these homes.
With the budget announcement due on March 20th it is unlikely these final pressures will affect any changes to the plan already decided by Mr Osbourne.
With the financial future of the UK still looking very vulnerable, the government has a very difficult job. The UK needs money in order to stimulate growth but on the flip side, this only serves to increase the already huge deficit we are facing.
Finding the balance between incentive and savings is an unenviable task for Mr Osbourne and one which is unlikely to suit everyone.
Many MP’s are unhappy that much of the public spending funds are already ring fenced which leaves little opportunity to successfully support other areas of the public sector which need more help.
New housing is essential to keep property at an affordable level but also to help employment in the construction sector.
It will certainly be interesting to hear whether the housing industry in particular, will reap some rewards from this year’s budget or continue to expect tough times ahead.