The use of tax incentives to encourage the creation of more affordable homes will be part of the National Housing Federation’s submission for next year’s Budget statement.

The NHF called for the reduction in VAT to 5% to form part of the announcement in March.

It welcomed recent work done by the Cambridge Centre for Housing and Planning Research, which also recommends this reduction in VAT.

The research suggested five other ways to increase affordable housing, including tax incentives for the construction of affordable housing and more help for low-income workers.