Chancellor Alistair Darling is set to unveil an emergency £1 billion package in tomorrow’s budget to help revive Britain’s ailing housing market.
The package will include a fund to build extra council houses, extend the stamp duty holiday on buying, and restart work on projects mothballed during the recession.
A key part of the package is understood to be a five-point programme to build homes and support property owners.
The Chancellor is making housing a priority despite the poor state of the Government’s finances, amid signs that the UK was facing a twin crisis of a falling supply of homes and a rapid increase in people failing to keep up with mortgage payments due to unemployment.
Darling remains confident that the government’s measures to ameliorate the downturn’s impact will pay off later this year, and that measures to help construction, currently 6 per cent of the economy, is vital to any recovery.
Despite admitting that state borrowing will increase to £170 billion in the current financial year, he will find cash to deal with unemployment, and support for key industries and the construction sector.
The £1 billion housing plan will include:
• A fund for the state to take a stake in housing projects where work has stalled. Government money may also be used to finance infrastructure such as roads.
• Financial help where houses have been built but cannot be sold because of falling prices. Sources said this would be through a combination of joint equity schemes and by converting houses intended for the private sector into social housing.
• A fund to reverse the trend of 30 years and build thousands of council houses.
• Extending stamp duty holiday on properties over £175,000 until the year’s end.
• Extra cash for the mortgage rescue scheme, amid evidence that rising unemployment is threatening more people with repossession than anticipated last autumn.