The banks should have mandatory lending targets for new mortgage lending imposed on them by the Government according to the Construction Industry Federation (CIF). The federation is also calling for the residential mortgage approval process to be reviewed so that people looking to purchase their homes are able to drawdown the money and not be subjected to extra hurdles put in place by the banks to prevent them from accessing the funds.

These proposals form part of the CIF's Pre Budget submission to the Government, which is seeking to have measures introduced to help the struggling construction sector in this country to recover.

Other proposals outlined in the Pre Budget submission include:

• Reducing the current VAT rate of 13.5% to 9% for construction services on a temporary basis. This rate is currently applicable to the tourism sector and would help act as a short term stimulus for the construction sector, creating employment opportunities and encouraging private investment.

-- Advertisement --

• The Part V social and affordable housing obligations should be suspended as they are no longer viable in the current housing market.

• The programme for installation of water meters should be fast tracked so that all meters can be installed early in 2013 to enable metered water charging to be introduced next year. Revenues generated under the metered water charges should be ring fenced to provide local water services infrastructure.

• Local authority development charges should be revised downwards to reflect the reduction in construction activity and the lower market values of new developments.

• People who buy newly constructed homes should be entitled to a holiday of up to 10 years from the payment of the property tax. This can be justified arising from the VAT and development contributions paid up front for the construction of the new home. It would also act as a stimulus for the new housing market.

Speaking about the measures contained in the Pre Budget submission, CIF Director General, Tom Parlon said: "The Budget offers an annual opportunity for the Government to announce a wide range of measures that will help the economy. Among their considerations we are urging them to include measures that will help get the construction sector working again.

"We have put forward a range of policy suggestions which if implemented could have a major impact on the construction sector – a sector which continues to be a major employer in this country, despite the declining level of activity. Most of these are practical initiatives which would help stimulate construction in this country and would not involve a major cost to the Exchequer."

(CD/GK)