UK plans new town to relieve pressure

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London - Britain planned to extend a scheme to encourage house building and develop a new town close to London, Finance Minister George Osborne said yesterday, ahead of a Budget announcement this week that will stick closely to his austerity programme.

The government would extend until 2020 its programme of providing equity loans to buyers of newly built homes, adding a further £6 billion (R107bn) to the scheme.

“I want to extend the Help to Buy scheme for newly built houses,” Osborne told BBC television. “It was going to end in 2016. We are going to extend it for the rest of the decade. That would mean 120 000 new homes.”

Asked about his Budget statement, which is due on Wednesday, Osborne stuck to his message that his economic policies were helping the recovery but reiterated that further difficult decisions about fixing public finances lay ahead.

The government is seeking to boost construction of homes to help address a shortage that is helping to push up prices.

Under the two-part Help to Buy Scheme, buyers of newly built homes worth up to £600 000 can seek equity loans from the government. It had planned to set aside £3.7bn for the scheme until 2016.

The equity loans part of Help to Buy differs from the second, controversial, phase under which the government provides guarantees to encourage lenders to provide mortgages to people who have been frozen out of the market by the soaring size of deposits required.

Osborne said the government would support the development of Britain’s first new so-called garden city, where town and country living are combined with affordable housing and green space, in nearly 100 years to provide more homes for the under pressure south-eastern region. The government would invest £200m to support the construction of 15 000 new homes at Ebbsfleet, which is on the high-speed rail line linking London with Paris and other cities in Europe. – Reuters


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