The Government's new housing strategy is far from radical and only makes a small step in tackling the worst housing crisis we have seen for many years, says the Federation of Master Builders (FMB) in response to the Government's Housing White Paper.

In particular, it does little to help small and medium sized (SME) house builders who have the potential to deliver the homes that are required if the right policies and incentives were put in place.

Brian Berry, FMB Director of External Affairs said: "The scale of the housing problem is now so enormous that we need to increase the supply of new homes by at least 500,000, the equivalent size of Birmingham, by 2015, if we are to meet rising demand. If the Government was seriously committed to increasing the supply it would reintroduce housing targets for communities that failed in their obligation to meet local demand.

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"The Government's proposed mortgage indemnity insurance scheme is a welcome step as availability of mortgage finance is a key issue killing off housing demand. Typically a mortgage now requires a 20%-25% deposit with the result that the average first time buyer is now aged 37. Last year only 15% of mortgages required a 10% deposit as compared to 40% before 2008."

Mr Berry continued: "The Government has committed to reducing the burdens on the house building sector over the lifetime of the parliament but it is continuing with expensive and complicated policies conceived by the last government during the housing boom. The Community Infrastructure Levy which would add £6,370 to the cost of an average sized house, and the zero carbon policy which significantly gold plates EU standards will add around £10,000 to the build cost of a home."

He concluded: "We shouldn't forget that there are over 700,000 empty homes in England that could be brought back into use. Cutting the rate of VAT from 20% to 5% would help boost the renovation of these properties and help increase the housing supply within a very short time."

(CD)