NewsArticle-06-11-2008

The home building industry has welcomed the Bank of England’s decision to cut interest rates by 1.5%, saying that it sends a powerful message to the consumer.  However Homes for Scotland warns that this reduction must be quickly passed on to home buyers in order to kick-start the pressurised housing market.

Jonathan Fair, Chief Executive of Homes for Scotland (right), which represents companies building 95% of the country’s new homes, said: 

“Lenders must be persuaded to pass this substantial reduction on at the earliest opportunity.  Even more importantly, it is vital we see the LIBOR rate gap close if businesses and consumers are to benefit from further liquidity being injected into the economy and borrowing becoming more affordable.

“The events of recent months have demonstrated the enormous impact the housing sector has on the whole economy.  There are two issues at stake here – people are anxious about moving house and this is stagnating the market.  In addition housing provision, so vital to Scotland’s economic development, will be at serious risk if continued decisive action is not taken.

“While this is a turbulent time, people recognise that housing remains a solid investment in the long term, particularly for buyers trading up the property ladder. Home buyers and the housing industry can take heart from today’s announcement, the latest in a series of positive measures aimed at bringing stability back into the economy.”

Ends

Enquiries to:

Beth Hocking or Jennifer Kennedy at Homes for Scotland – 0131 455 8350 

Note to Editors:

Homes for Scotland represents the country’s home building industry which:

- is the largest source of private investment in Scotland
- is the largest user of the planning system in Scotland
- last year built 20,000 new homes, contributed £6bn to the economy and directly impacted the employment of 100,000 people