FMB backs change to finance scheme
The Federation of Master Builders (FMB) has welcomed government plans to adjust the Funding for Lending scheme to better support small businesses.
However, it says the Government must also stand behind its Help to Buy scheme and find new ways to incentivise more house building.
FMB chief executive, Brian Berry, said: 'Our members have been telling us for some time that the Funding for Lending programme has serious flaws, and that the banks remain reluctant to lend to them. In fact small construction firms report that access to finance is the single greatest barrier they face when attempting to grow their business.
'Construction companies need to able to secure financing to respond to increasing demand, which is beginning to improve thanks to enhanced consumer confidence and the Help to Buy scheme bringing vitality back into the housing market.'
Mr Berry continued: 'By rolling back the portion of guarantees aimed at shoring up individual mortgage lending and concentrating instead on backing loans to small businesses, we hope our members will now see strides forward on the part of lenders when it comes to financing the resurgent construction sector.'
'While we welcome the simplification to what has been a confused and confusing approach to SME financing to date, the Government must also urgently consider a reduction in VAT on domestic building work from 20 to 5 per cent, which would be a boon to householders looking to carry out repair and maintenance work and make their homes more energy efficient.'
Mr Berry concluded: 'Reforms to the planning system and the removal of barriers to smaller developers and house builders are also key, as we are still not building anywhere near enough new homes to keep up with rising demand.'