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Labour talking to banks over Help to Build

by: Paul Robertson
  • 27/10/2014
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The Labour Party has held talks with five of the high-street banks on proposals to increase house-building with the help of government loan guarantees for builders.

According to the Independent on Sunday , Chris Leslie, the shadow chief secretary to the Treasury, and housing spokesperson Emma Reynolds met representatives of HSBC, Barclays, Lloyds, Standard Chartered and Royal Bank of Scotland last week.

The Labour Party has said it would introduce a “Help to Build” scheme if it came to power after the next general election.

Its idea is that the government would underwrite bank loans to small house-builders with a turnover of up to around £20m a year.

This is an alternative to the government lending the cash up front to fund housing developments has been ruled out as affecting the UK’s balance sheets.

The high street banks have been loath to loan into the sector since the recession, becoming more cautious since the onset of the financial crisis.

Discussing the situation, Reynolds said: “Just 115,000 homes were completed over the past year which isn’t even half the number of homes we need to keep up with demand. By 2020 there will be a shortage of over two million homes across the country.

She added: “We are committed to getting 200,000 homes built a year by 2020 and a long-term goal that will see us double the number of first-time buyers within a decade and meet housing need for the first time in 50 years.”

According to the report, Lloyds and Barclays have offered to host further meetings to discuss the technical details of the proposal.

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