The Chancellor's Budget announcement of a £500 million Builders Finance Fund for small house builders will provide a major boost for housing supply and has been welcomed by the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said: "Access to finance is a major stumbling block for viable SME house builders so this government intervention is much needed as many major banks are still reluctant to lend for small residential developments. This additional support will provide the necessary finance to small house builders and help increase the overall supply of new housing through a well-functioning SME sector.

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"Unfortunately today's Budget overlooks the need to make our existing homes an infrastructure investment priority. A reduction in VAT to 5% on housing renovation and repair is the simplest and most effective way to empower home owners to refurbish their properties to make them more energy efficient and cheaper to run. This cut in VAT would provide a £15bn economic stimulus over five years and up to 95,000 jobs which re much needed while our economy is still in recovery."

(CD/MH)