LONDON, Oct 5 (Reuters) - Britain’s government will buy unsold homes built by developers using a 2 billion pound fund ($2.5 billion) announced earlier this week, a move designed to get construction firms to commit to bigger projects, a trade journal reported on Thursday.
On Monday Britain launched a 5 billion-pound housing stimulus package, including plans to borrow 2 billion pounds to increase the pace of house-building which will now be used to guarantee housing developments.
“It’s about us going to a housebuilder and instead of expecting the normal build-out rate of 50 units a year, we’ll say: ‘We want you to build all 500 in one go, and what we’ll do is guarantee to take them off you if you can’t find a buyer’,” Edward Lister, chairman of the Homes and Communities Agency, told Property Week.
Although the housing market has shown signs of cooling since the vote to leave the EU, a chronic shortage of properties keeps prices out of the reach of many young and low-income Britons.
A committee of lawmakers estimated that Britain needs to build 300,000 homes per year to meet demand and cool price growth. The country has not built more than 200,000 homes in a single year for a decade. ($1 = 0.7857 pounds) (Reporting by Andy Bruce; Editing by Raissa Kasolowsky)