More than 47,000 new homes needed to help first-time buyers

Emma Reynolds, Wolverhampton North East MP, said a study by the Sir Michael Lyons Housing Commission also showed there needed to be increased competition in housing construction.

The commission found that, 25 years ago, small building firms were responsible for two thirds of new homes but that figure had now fallen to less than one third. Over the same period, the number of firms building between one and 100 units had fallen from more than 12,000 to fewer than 3,000.

Miss Reynolds said unless more new homes were built, property prices would continue to rise further out of reach for first-time buyers because supply was not keeping up with demand.

"Young people and families are struggling to get on the housing ladder because we are simply not building enough homes," she said. "Under David Cameron, house-building has fallen to its lowest level in peacetime since the 1920s."

She said Labour's Help to Build scheme would tackle the root cause of the credit crisis by underwriting bank loans to small building firms. She said her party was aiming to get 200,000 homes a year built by 2020.

"It would kick-start the supply of homes by providing government guarantees for bank lending to small and medium-sized construction firms in a similar way to how the current Help to Buy scheme underwrites mortgages," Miss Reynolds said.

She added that surveys focussing on smaller building firms by the Federation of Master Builders (FMB) consistently showed that access to finance and land are the most significant obstacles to growing their businesses and increasing supply.

"In the FMB's 2013 House Builder Survey, 60 per cent of house-builder members cited access to finance as a major barrier to their ability to increase their output of new homes, more than any other factor," she said. "We need a more diverse and competitive housing market to build the homes we need but in recent years small builders have fallen into decline.

"Through our Help to Build scheme, Labour can boost small builders, increase house building and help make home ownership a realistic aspiration for the next generation. Labour is committed to building many more homes which is why we will get 200,000 homes a year built by 2020."

Miss Reynolds said figures obtained by her party from the House of Commons library showed that the gap between housing supply and demand had grown nationally to more than 500,000 homes between the 2010/11 financial year and 2013/14. By region, that equated to 47,170 for the West Midlands, 40,940 for East Midlands; 62,520 for the east of England; 53,390 for London; 16,720 for North East; 38,340 for North West; 85,950 for South East; 36,030 for South West; 45,750 for Yorkshire and The Humber.