By Kylie MacLellan
LONDON, March 16 Britain plans to extend a
scheme to encourage house building and develop a new town close
to London, finance minister George Osborne said on Sunday, ahead
of a budget announcement this week that will stick closely to
his austerity programme.
The government will extend until 2020 its programme of
providing equity loans to buyers of newly built homes, adding a
further 6 billion pounds ($10 billion) 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 now 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 he reiterated that further difficult
decisions about fixing the public finances lay ahead.
Osborne is unlikely to be able to offer much to voters in
the budget, little more than a year before the next national
election, although he is expected to announce a latest increase
in the amount of income exempt from income tax.
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 pounds can seek equity loans from the
government. It had planned to set aside 3.7 billion pounds for
the scheme by 2016.
The equity loans part of Help to Buy differs from the
second, more controversial, phase under which the government
provides guarantees to encourage lenders to provide mortgages to
people who have been frozen out of the property market by the
soaring size of deposits required.
The extension of the equity loan part of the scheme will be
welcomed by housebuilding firms such as Barratt Developments
and Persimmon, which have sold hundreds more of
their homes quicker than expected as buyer demand bounced back.
The industry has previously called for more clarity on how
the scheme would end.
Osborne also said the government would support the
development of Britain's first new so-called garden city, which
aim to combine town and country living with affordable housing
and green space, in nearly 100 years to help provide more homes
for the under pressure southeastern region.
He said the government would invest 200 million pounds to
support the construction of 15,000 new homes on the site at
Ebbsfleet, which is on the high-speed rail line linking London
with Paris and other cities in Europe.