LONDON, Sept 29 (Reuters) - The government should back measures to help home buyers and boost
infrastructure spending to get the British economy moving, business lobby the CBI said on Thursday.
The comments come ahead of the ruling Conservative party conference next week when finance minister George Osborne will face pressure to spell out how he plans to boost faltering economic growth.
CBI Director-General John Cridland noted that the number of first-time home buyers had fallen to 36,200 in the first three months of the year, down from a peak of 167,400 a decade ago.
Rising property prices and tighter lending after the credit crisis has pushed up the average age of first-time buyers.
'Now is the time to stop the stagnation and get the housing market flowing again,' Cridland said in a speech to a dinner in north-east England.
'The CBI wants to see a revitalised Mortgage Indemnity Guarantee, to reduce the risk of higher loan to value mortgages,' he added.
'One way this could be done would be through a deal between mortgage providers and house builders. There could also be a role for government to step in with some very focused support to bridge the gap,' he added.
The Mortgage Indemnity Guarantee is a form of insurance taken out when buyers have to borrow a large part of a loan. It fell into disuse during the housing boom when negative equity became less of a threat.
Cridland said another way to boost ownership would be to allow buyers to access savings in their pension schemes through a loan-back scheme, while shared ownership could also be explored.
Cridland said he wanted Osborne to use his annual autumn statement to parliament on Nov 29 to revive the housing market.
He also renewed his call for higher spending on infrastructure projects such as transport and power stations, with the private sector providing much of the funding in partnership with a cash-strapped government.
'It will help unlock some of the 60 billion pounds of potential investment currently on company balance sheets and could create new jobs into the bargain,' he said.
(Reporting by Keith Weir) Keywords: BRITAIN HOUSING/CBI
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