Do we need to reinvent the wheel on housing finance? | Housing network | Guardian Professional

Do we need to reinvent the wheel on housing finance? | Housing network | Guardian Professional

If the government finally accepts that fiscal consolidation, even when coupled with quantitative easing, is not a policy that can deliver adequate economic growth, what might a credible plan B look like? A recent report for Shelter made the case for investment in housing as a key component of an alternative. The report focuses primarily upon using construction as part of a short-term stimulus package, but it also recognises that housing investment has a longer term impact on economic growth.

Housing can make a strong claim to be an appropriate vehicle for more active fiscal policy. There are strong multiplier effects: the report notes that every additional £1 of demand in construction generates a total of £2.09 of economic output. There is relatively little leakage from spending on construction.