The call comes after the Liberal Democrat conference in Brighton voted overwhelmingly against Coalition Government plans to allow 8m long extensions to be built without planning permission.
Although the Lib Dem party conference vote is not binding, it deals a huge blow to the Coalition Government’s plans to reform the planning system.
The proposals formed part of a package of measures announced by Conservative Prime Minister David Cameron and Lib Dem Deputy Prime Minister Nick Clegg earlier this month designed to boost the flagging economy.
A month-long consultation is taking place on the plan to ease rules, for a three-year period, on developments including home extensions of up to 8m.
The industry believes that a fresh approach to financing home extensions will prove a more effective and less controversial approach to kick-starting building work.
Mike Leonard, director of the MMA, said that main obstacle facing homes owners was not planning, but finding themoney for building work.
He said: “Planning is not the issue with extensions, it is finance and confidence.
“We are calling for an immediate cut in VAT on the labour for extensions to 5% for 12 months.
“We also need to get lenders to offer a 3% home improvement loan for homeowners with equity in their home.”
Communities minister Don Foster Told the conference that the Government “needed to do everything possible to Get Britain Building”.
He said he would listen to the conference’s concerns and admitted the proposals could be improved.
