Cable Says U.K. Could Use Top Rating to Back Housebuilding

Business Secretary Vince Cable suggested the British government could use its top credit rating to fund housebuilding projects in an effort to push money into the economy and ease a shortage of homes.

Speaking in London today, Cable contrasted housebuilding in the current economic slump with that of the 1930s, when in 1934 alone 300,000 homes were constructed, creating jobs. Britain began construction on 139,430 homes last year.

“There are now some interesting ideas out there for government guarantees that could trigger a significant volume of housing investment, replicating the recovery model of the 1930s and leading hopefully to a virtuous circle of new building lending to increased affordability and also increased private demand,” Cable said. He said the potential for “co-financing private housebuilding” was “large.”