Housing strategy aims to build more than 200,000 homes
By Nick Mann | 21 November 2011
The government today launched its housing strategy, encouraging councils to bring forward plans for large developments and offering £400m in cash for stalled projects.
The strategy, Laying the foundations, aims to address a projected shortfall of more than 100,000 homes a year if housebuilding remains at current levels.
The £400m ‘Get Britain Building’ fund will help to provide up to 16,000 new homes by restarting projects that have planning permission but had shut down due to economic conditions, ministers said.
Councils that want to initiate large housing developments will be able to access a ‘programme of support’ to help bring projects forward. This will include giving them the chance to take advantage of ‘streamlined’ planning processes.
The strategy includes details on reforms of the right-to-buy scheme for social housing tenants, first announced at the Conservative Party conference. The government is offering bigger discounts for those choosing to buy their homes. It intended to use receipts from these sales to support the construction of up to 100,000 new affordable homes for rent.
It also confirms plans to free public land for building up to 100,000 homes for sale by 2015. Developers will be offered a ‘Build Now, Pay Later’ incentive, under which they can pay for the land after homes have been sold if they do not have the finance to buy the land upfront.
Writing in the foreword of what they claimed was a ‘radical and unashamedly ambitious strategy’, Prime Minister David Cameron and Deputy Prime Minister Nick Clegg said it would ‘unlock the housing market, get Britain building again, and give many more people the satisfaction and security that comes from stepping over their own threshold’.
However, Labour’s shadow housing minister Jack Dromey criticised the plans, which he said involved the government giving back only 10% of the £4bn cut to housing investment it had made last year.
‘With millions in need of a decent home at a price they can afford, the country is gripped by a growing housing crisis. Despite 127 government announcements, more than one a week since the coalition took power, their own figures show a 6% fall in new homes and a 10% increase in homelessness,’ he said.
Elsewhere, the strategy outlines plans to use public money to help underwrite a scheme to allow first time buyers to enter the housing market with only a 5% deposit.
Under this indemnity scheme, government and homebuilders will provide security on loans taken out by first-time buyers for new homes, so if the house is sold on for less than the outstanding mortgage total, the lender will be able to recover their loss.
It includes proposals to ‘improve fairness’ for those living in social housing. These include consulting on a ‘Pay To Stay’ system, which would involve higher-paid social housing tenants having to pay up to market rents if they want to remain in their homes.
Councils will also be given powers to reject applications for social housing from people deemed to already own a ‘perfectly acceptable’ home of their own, while the government will also consult on how to address the ‘outrage’ of 50,000 unlawfully-occupied social homes.
Leslie Morphy, chief executive of housing charity Crisis, said: ‘Today’s housing strategy is long overdue. With homelessness and housing waiting lists rising, the real test will be whether today’s announcements really do see hundreds of thousands of desperately needed new houses being built – especially affordable homes to rent.
‘It must also not be forgotten that just last year the housing budget was slashed by 70% and other cuts to Housing Benefit, housing advice and homelessness services are hurting people now and will directly undermine the laudable aims set out today.’