LONDON Housebuilders Barratt Developments and Crest Nicholson set out plans to expand their businesses on Thursday after the British government extended a housing scheme that has driven buyer demand.
Chancellor George Osborne confirmed in his annual budget on Wednesday that the government would extend the equity loan portion of the Help to Buy scheme for four years longer than planned to 2020, a move he said would deliver 120,000 new homes.
In response, Barratt Developments, Britain's largest housebuilder by volume, said it plans to hire 3,000 more workers as it anticipates increasing the number of sites it is working on to 450, from the current 380.
Smaller housebuilder Crest Nicolson, said it would be setting up a third, new business in the Home Counties region around London, which could add up to 600 homes a year to its completion rates once it is fully up-and-running.
"As the land we are buying today is for the homes we will be building in 2016 and beyond, the industry needed a longer term framework for Help to Buy," Barratt's Chief Executive Mark Clare said.
Crest's Chief Executive Stephen Stone said the extension would help to underpin demand for new homes for the next six years "and that gives us the confidence".
The Help to Buy scheme has greatly benefited the housebuilders by accelerating Britain's housing recovery and shoring up demand to boost selling rates and profits. It has also allowed a number such as Persimmon and Taylor Wimpey to unveil plans to hand out cash to shareholders.
The extension also illustrates how the debate over Britain's housing shortage has crept to the top of the political agenda, with elections just over a year away.
(Reporting by Brenda Goh; editing by Kate Holton)