The group believes housing should be the main focus of the budget in order to build confidence in the economy for both businesses and consumers.
In a letter to Chancellor George Osborne the CBI say they would like to see £2.2billion spent on housing and say this would be split over two areas,
- £1.25 billion on capital investment – including housing
- £950 million on high-growth business tax measures
That would mean the government would be funding an extra 50,000 homes to be built which the group believes could generate £18 billion for the economy.
However this is on the basis that house sales continue to rise as will house prices or it could mean even more empty properties at tax payers expense.
John Cridland, the CBI Director-General, said,
“The Government must stick to its fiscal plan but now is the time to kick-start confidence.
“Our measures will provide another boost for the housing market and will benefit first-time buyers, those trapped in negative equity and those looking to refurbish their homes.
“To boost the construction sector, we are calling for 50,000 new affordable homes to be built, incentives for refurbishing empty homes and the housing guarantee scheme to be extended to all types of housing.
“We must supercharge the NewBuy scheme to allow second-time buyers struggling to get on the next rung of the property ladder.
“With its relatively short lead-in times, house building offers the most bang-for-buck in growth terms – unleashing pent-up demand, while creating jobs and growth.”
The request from the CBI comes as the British Chambers of Commerce also called for the Chancellor to build more new homes over the next 2 years.
Although the BCC didn’t focus solely on the housing issue they have recommended the government fund an extra 100,000 homes by 2015.
John Longworth, director general of the BCC, said,
“If within the next six months there is no prospect of growth… you might have to consider actually borrowing more money but you should only do it to fund areas that the market would forgive.”