12 November 2010
Councils that approve new housing developments in their area will receive a funding boost from central government under proposals published today.
In a £1bn NewHomes Bonus fund, Whitehall will match the additional council tax raised on new homes for six years. It will also top up council funding with a further £350 per home over the same six-year period.
Councils and their communities will be able to decide how to spend the extra funding. They may choose to use to pay for a wider council tax reduction or to improve local facilities such as leisure centres and swimming pools.
Councils that build new affordable homes will receive a higher level of funding. Views are sought on the level of this enhancement and how an affordable home should be defined.
Housing minister Grant Shapps said the previous government’s target-driven efforts to boost housebuilding had failed.
‘That top-down approach slowed housebuilding to a trickle, so we need to take action to get the country building again. That’s why we’ve set aside almost £1bn so councils who build more homes start benefiting immediately from the extra cash, which they can spend on improving the local area.
‘For too long communities have fought against development because they can’t see how it does anything to improve their lives. I’m determined to change this.’
The announcement was welcomed by the construction industry. Liz Peace, chief executive of the British Property Federation, said: ‘Existing local communities need to see they are getting something back from additional housing development. The New Homes Bonus sends a clear signal that those communities accepting desperately needed housing will be rewarded while those that do not will lose out.’
Stewart Baseley, executive chair of the Home Builders Federation, added: ‘We welcome the commitment to a simple, easy-to-understand system.’
Sarah Webb, chief executive of the Chartered Institute of Housing, said the scheme was 'a positive attempt to encourage and reward local communities who support sustainable housing development'.
'The incentives for both market and affordable housing are welcome and over time could make a helpful contribution to housing growth,' she said.
'However, we are concerned about how the bonus will work with regeneration schemes and in areas where housing market renewal is under way.'
The consultation period ends on December 24.
