Trust in bricks and mortar

If George Osborne is serious about growth, a relatively easy decision awaits him: to stimulate the economy by spending more on housebuilding. David Cameron knows there’s a problem, and during Tory conference announced a “Tory Housing Revolution” to tackle the failing housing market, and plans to boost Right to Buy and release more land for house building that will deliver 200,000 new homes and create 400,000 jobs. All welcome, suggesting the government has recognised the role that housing can play in creating growth. But if the Treasury is looking to stimulate demand in the short term, there’s still much more that could be done.

Investment in housing can happen fast. Analysis of major house builders shows that land banks are already healthy, with planning permissions for between 188,000 and 250,000 new homes. An injection of finance to get these sites going will create jobs quickly, put money into the hands of construction workers that will increase demand and encourage more production in the crucial supply chain.