The plan will see the Treasury relax exisitng rules to allow councils to take a lead in house building by using all of their receipts from housing sales and rents to buy land to build houses for rent or shared ownership.
John McDonough, chairman of the CBI’s Construction Council, said: “At a time when house-builders are laying off thousands of skilled workers because of the lack of demand in the private sector, building more social housing will certainly help ease some of the pain the industry is going through.
But Mr McDonough warned that more than trebling the number of starts from around 20,000 to 70,000 would be a challenge.
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“The reality on the ground is that projects are getting bogged down in planning delays and some firms are being asked to re-bid for work as councils try to drive down costs.
“With the construction industry increasingly reliant on public sector spending to help off-set the weakness of the private sector, we need Government and local authorities to work with us so we can get back on track to meet targets for building new homes.
“But the housing market as a whole will not begin to stabilise until private buyers, particularly first-time buyers, can get mortgages at affordable loan to value ratios.”
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