Sajid Javid proposes government borrowing to kick-start housebuilding

Helen Cahill
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Sajid Javid speaking at the Conservative party conference in Manchester (Source: Getty)

Housing secretary Sajid Javid has made a bold pitch to chancellor Philip Hammond ahead of next month's Budget, arguing that the government should borrow billions of pounds to fund the infrastructure needed to boost Britain's supply of new homes.

Speaking at the start of a separate eight-week review into the process of buying and selling homes in England and Wales, Javid said: "What I want to do is make sure that we are using everything we have available to deal with this housing crisis.

"Where that means, for example, we can sensibly borrow more to invest in the infrastructure that leads to more housing, take advantage of some of the record low interest rates that we have, I think we should absolutely be considering that."

Read more: Theresa May to challenge developers over housing needs at Downing St summit

City A.M. understands the money could be used on projects such as the so-called Oxford-Cambridge corridor, a plan to install rail and road links that developers need to create new homes.

Killian Hurley, chief executive of developer Mount Anvil, said he was "hugely supportive" of the policy.

"Where the infrastructure improves, it’s a huge wealth generator and it’s a huge homes generator," he said.

David O'Leary, policy director at the Home Builders Federation, said government funding was essential for creating large developments.

Theresa May met with leaders in the property industry at a roundtable last week (Source: Getty)

"The upfront costs of creating a place are huge... an individual or even several developers together can’t really take on that burden," he said.

Javid yesterday refused to change course on the government's approach to the green belt, insisting that brownfield land should be used first.

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Chris Carr, joint managing director of developer Carr & Carr and a representative of the Federation of Master Builders, said more infrastructure investment would help developers survey and decontaminate brownfield sites.

"Any infrastructure funding would be beneficial if it was used to release small sites as well as the major development sites," he said.

Labour hit out at Javid, saying the Conservatives had not spent enough on affordable housing.

"If hot air built homes, ministers would have fixed our housing crisis," said John Healey, Labour's shadow secretary of state for housing. "Any promise of new investment is welcome, but the reality is spending on new affordable homes has been slashed since 2010 so new affordable housebuilding is at a 24-year low."

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