Business

CBI seeks new measures to boost first-time home buyers

Business lobby the CBI has called for the government to boost activity in the housing market, saying it could be a "game changer" for economic growth.

CBI director general John Cridland suggested employees should be allowed to borrow from their pensions.

"Without a steady stream of eager first-time buyers the housing market stagnates and our whole economy suffers," he said.

He also proposed a "revitalised" mortgage indemnity guarantee.

That is insurance that compensates lenders in case people fall behind on payments and the home has to be repossessed and sold.

He wants the chancellor to outline new measures in his autumn statement on 29 November.

'Loan-back'

Mr Cridland outlined his pensions proposal as well.

"Another way of helping first-time buyers to access finance to get on the property ladder could be to allow them to access locked savings in their personal pension pots through a loan-back scheme," he said at the CBI North-East Annual Dinner.

"Members of company schemes could borrow money from their own pension pot at a low cost, paying the loan back through their salary at any time during their working life."

Mr Cridland also encouraged the government to boost its investment on infrastructure.

In August, the CBI predicted the UK economy will grow at a "sluggish" rate of 1.3% this year, according to the CBI.

The group has lowered its forecast for the UK's GDP in 2011, down from its previous prediction of 1.7%, made in May.

But the CBI still expects the economy to pick up in 2012 - growing 2.2%.

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