The head of Travis Perkins, the British builders' merchant and DIY retailer, has called on finance minister George Osborne to re-introduce mortgage interest tax relief for first time buyers to release pent-up demand in the housing market.
The housing market is so important to the UK economy, it's operating at such low levels at the moment and there's huge pent-up demand. We have to find a way of releasing that pent-up demand, Chief Executive Geoff Cooper told Reuters in an interview on Wednesday.
His solution is to reintroduce MIRAS (mortgage interest relief at source) for first time buyers for the first five years after a property purchase. MIRAS was scrapped in 2000.
That would certainly get the housing market moving because people that have just been locked out of the market in the last three or four years are the first time buyers, he said.
I'm afraid I think people in the Treasury all live in houses they bought a long time ago and can't remember struggling to get on the housing market. I wish some of them would.
Cooper, who was speaking after Travis Perkins, posted a 37 percent rise in 2011 profit, also wants Osborne to use his March 21 budget statement to gear up the level of investment in Britain's infrastructure.
Investment in infrastructure helps the economy because it doesn't suck imports in, it generates domestic activity and I think government ought to be able to find ways of financing infrastructure investments at a higher level than they are at the moment, he said.
He said the government should look to finance the capital from the future revenues that some of those infrastructure projects would deliver.
(Reporting by James Davey)