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Funding for Lending Scheme could lead to boost in house building

Home builders have welcomed the recent announcement on the Funding for Lending Scheme (FLS) that could increase house building and bring much needed social and economic benefits to the country.

A lack of affordable lending – both for individuals and businesses – has been the major constraint on housing supply in recent years. This has resulted in an acute housing supply crisis that has left people unable to buy, lengthening housing waiting lists and resulted in tens of thousands of builders losing their jobs.

The FLS could bring a number of benefits for home builders. Improved mortgage availability and lower rates should boost demand for new homes and allow beleaguered first time buyers in particular to realise their ambition of home ownership.

Stewart Baseley, Executive Chairman at the Home Builders Federation, said.

“This is a positive move. A lack of lending for individuals and businesses has been the main constraint on house building in recent years, making Britain’s housing supply crisis even more acute.

“However the success of the scheme is in the hands of the mortgage lenders. If they take advantage of the FLS and reflect its lower funding costs in lower mortgage rates, then we should see an increase in new home buyers. This in turn will bring a much-needed increase in economic activity and create tens of thousands of jobs across the country.”