Housing crisis to persist up to 2010

Housebuilders are urging the government to speed up a solution to end the housing crisis, in the wake of a report that says the market will suffer until 2010.

A Treasury-commissioned report by former HBOS chief executive Sir James Crosby claims a shortage of mortgage finance will persist up to 2010 and could restrict consumer spending.

Home Builders Federation director of external affairs John Stewart called for immediate action.

He told the Guardian: “If the Treasury does not take up any recommendations from Crosby until the pre-budget report in October or November, this will unduly prolong the frustration of those, particularly first time homebuyers, who are currently having difficulty obtaining mortgages to buy their first home.

“The benefits of action will not be realised until spring 2009 at the earliest – seven or eight months from now.

“This is too big a price to pay as in the meantime steeply falling housing transactions, weakening house prices and sharply lower housebuilding activity risk damaging Britain’s wider economy.”

Mr Crosby is not due to make a final recommendation before autumn and said yesterday he might suggest no government intervention in the housing crisis at all.