MP calls on Government to unlock growth potential

Brian Binley MP for Northampton South has called on the Government to do more to aid the plight of first time buyers and stimulate growth in the economy following reports last week that young people are finding it harder than ever to get on the property ladder.

Bank of England figures this week showed that the number of mortgages approved for new house purchases hit a new low in April, 4% lower than in March and 9% lower than in April last year.

The Halifax also published the results of a survey of 8,000 20 to 45 year olds, concluding that 92% of people thought it was hard for first time buyers to get a mortgage with 60% of them saying it was very hard or virtually impossible.

Brian said: “Research by the Federation of Master Builders has highlighted the fact that the financial crisis has severely restricted the availability of finance for developments and mortgages.”

“The Government must recognise that it needs to do more to stimulate demand in the economy and one way we could look at doing that is to cut the VAT on home repair, maintenance and improvement work.”

“The Federation of Master Builders has led a long running campaign to cut VAT in this area and it is estimated that a 5% cut could lead to a net revenue loss to the Government of between £102 million and £508 million but a total stimulus effect in the economy in the region of £1.4 billion in the first year alone.”

“They also estimate that it could create up to 34,500 new construction sector jobs by the end of 2019 and a total of 81,500 jobs in the economy by the end of 2019.”

“They also suggested that the Government extends the first buy scheme to small and medium sized building contractors who represent around 50% of the building sector.”

“As confidence takes off in the construction industry it will do in other areas of the economy as well. Around 70% of people in the UK own their own homes and view the economic situation purely based on their own personal circumstances.”

“By cutting VAT in the home improvement sector and extending the first buy scheme the Government can unlock the sort of confidence in the economy to really generate the demand we need to get the economy moving.”