Call for thousands more UK homes

The group warns the building slump could risk another housing boom

The government is being urged to build the country out of recession with a major programme of house construction.

The newly formed 2020 Group of building bodies, councils and unions says there is a need for 100,000 new affordable homes to rent over the next two years.

It says providing new housing will meet an "urgent" demand, and help to maintain construction industry jobs.

The government said it was already working to get an extra 12,500 affordable homes ready in two years.

It said it was investing £160m to buy almost 5,000 unsold homes, and spending a further £550m on building 7,500 new properties.

A spokesman said this spending was part of a longer-term £8bn programme to deliver more affordable housing both to buy and to rent.

Job fears

The recession has meant a collapse in house prices, lending and construction.

The recent sharp rise in repossessions is putting extra pressure on councils, with the number of people on housing waiting lists in England set to reach five million by the end of next year.

This is a one-off chance for the government to stimulate the economy and help meet housing need in one fell swoop David Orr NHF chief executive

The 2020 Group also estimates there will be 450,000 job losses in the construction industry between 2008 and 2010.

But, it says, with many construction sites already identified, a government cash injection could see building start within months - it wants an extra £6bn in government money.

Group chairwoman Kate Barker, a member of the Bank of England's Monetary Policy Committee, said house building offered "excellent value in terms of sustaining economic activity" and was "urgently needed".

A government spokesman said it was "committed to major increases in the supply of affordable and social housing to meet the needs of families on waiting lists".

'One-off chance'

Chief executive of the National Housing Federation David Orr said a mass house-building programme "could kick-start the economy, save jobs, and deliver new homes for more than 200,000 people".

"This is a one-off chance for the government to stimulate the economy and help meet housing need in one fell swoop," he said.

The 2020 Group says its recommendations would:

• Save 30,000 jobs in the industry, as well as thousands which support the industry, including in building materials, furniture and white goods
• Preserve construction jobs and apprenticeships which would help prevent a loss of key skills
• Enable house builders to continue to invest in housing supply and reduce the risk of a housing supply shortage once the economy recovers
• Improve cash-flow and reduce risk for developers and suppliers currently experiencing severe financial pressure
• Increase labour market mobility by providing more affordable and social housing.

The 2020 Group also argues that government would profit from the investment as the creation of jobs would lead to increased revenue from taxation.

Brendan Barber, TUC General Secretary, said: "When such investment can ensure such an important sector as construction retain jobs, capacity and its skills base, the case for a significant boost in the budget becomes overwhelming."

Adam Sampson, chief executive of housing charity Shelter, backed the calls for a major building programme and said more homes would also help thousands of people currently living in poor housing.

The 2020 Group is made up of the National Housing Federation (NHF), housing charity Shelter, the Local Government Association (LGA) and the Trades Union Congress (TUC).