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Construction leaders are calling on the new Prime Minister to intervene as construction output flatlines for the benefit of the wider economy as the latest statistics show that the sector is flatlining, says the Federation of Master Builders (FMB).

Commenting on the latest construction output statistics from the Office for National Statistics, which show that construction output growth in Great Britain was flat (0.0%) in the three-month on three-months to May 2019, Sarah McMonagle, Director of Communications at the FMB, said “Alarm bells will be ringing in the ears of the two candidates vying to be Prime Minister, with these latest stats showing that the construction sector is at a standstill. Whoever wins the race for PM, I want to see that person take decisive action in their first days in office by intervening to stimulate our waning sector, which is so vital to the health of the wider economy. Indeed, without it, our country’s house building aspirations will be impossible to deliver.”

“The poor performance of the construction sector over the past few months was driven partly by a drop in activity in the repair and maintenance sector. As you would expect, this part of the construction industry is particularly vulnerable to dips in consumer confidence, which the threat of a ‘no deal’ Brexit continues to perpetuate. There would be no better way to encourage homeowners to commission building projects in the second half of this year than by slashing VAT on housing repair, maintenance and improvement from 20 percent to 5 per cent. Furthermore, when we asked our members how the next PM could best prevent an economic downturn, almost 90 per cent felt this was the most effective way to achieve it.”

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), added “Boris the builder must build columns instead of writing them if he is to fix the housing crisis and restore the hope of home ownership to a generation. We will only reach the number of good quality homes we need, and at the rate we need them, if local house builders are freed up to build as many homes as the large house builders. We want to see Boris bring down the barriers facing construction SMEs, including those who repair and maintain our homes. If Boris is looking to cut taxes, then we suggest slashing VAT on home improvement works, as nine in ten builders believe this is the single best tool in Boris the builder’s toolkit to prevent an economic downturn post-Brexit. Bojo must restore the housing market’s mojo to ensure that Brexit Britain is built on strong foundations.”

To the critical acclaim of the construction industry, the government confirmed plans for a new generation of council and housing association homes yesterday. Funding for affordable homes will be increased by a further £2 billion to more than £9 billion. But how exactly will this money be used to boost housing? Buildingspecifier investigates:

The numbers of homes will be determined on type and location of housing, and bids received for funding. With a typical £80,000 subsidy, this £2 billion investment can supply around 25,000 more homes at rents affordable for local people.

Ministers also confirmed plans to create a stable financial environment by setting a long term rent deal for councils and housing associations in England from 2020.

The funding will further support councils and housing associations in areas of acute affordability pressure, and where working families are struggling with the costs of rent and some are at risk of homelessness.

This complements recent announcements on supporting tenants in the private rented sector and on extending Help to Buy.

The government’s Affordable Homes Programme will increase from £7.1 billion of public funding to £9.1 billion, and the £2 billion additional funding for affordable housing could lever in total investment by housing associations and councils of up to £5 billion.

Since April 2010, around 333,000 affordable homes have been delivered, including 240,000 for rent. More than twice as much council housing has been built since 2010 than in the previous 13 years.

As set out in the Housing White Paper, to help encourage more investment in social housing, government will create a stable financial environment by setting a long term rent deal for councils and housing associations in England.

Under the proposal set out this week, increases to social housing rents will be limited to the Consumer Price Index (CPI) plus 1% for 5 years from 2020. This will give social tenants, councils and housing associations the security and certainty they need.

Previously, the government’s affordable housing policy primarily supported ‘affordable rent’ – rents of up to 80% of local market level – and low-cost home ownership. This announcement now extends support for ‘social rent’ – which are lower rents, set according to national guidelines.

These latest measures reinforce this government’s approach to back housing of all tenures – with more social housing; extra security for those in the private rented sector; and helping people get onto the housing ladder.