New housing strategy to tackle stock supply
A £400m fund to kick-start stalled housing schemes in England has been revealed as part of the government's new housing strategy.
28 Nov 2011
The Get Britain Building funding pot is expected to help house builders deliver up to 16,000 new homes and 32,000 jobs, according to the strategy out this morning.
In addition, the government plans to provide around £1.8bn to help develop affordable homes, of which the first £1bn worth of contracts have been confirmed under the Affordable Homes Programme. The government expects this to deliver up to 170,000 new affordable homes across England over the next four year.
A further £30m has also been ear-marked for self-builders, which will provide short-term finance on a repayable basis, details of which are yet to be announced.
Meanwhile, housing associations and councils will be able to apply for part of £100m of government funding to help bring empty homes in their boroughs back into use to help boost housing supply.
Imtiaz Farookhi, chief executive of the National House Building Council, says: "It is clear that the Government is taking the current situation very seriously and we are committed to working with, and advising, the Government in an attempt to support the industry at this crucial time. We believe that with record levels of customer satisfaction, there has never been a better time to invest in high-quality and energy efficient new homes in the UK.
"With NHBC predicting overall housing figures for 2011 to show little improvement on the previous year, it will be essential to monitor volumes of house building over the short to medium term. The Government should be prepared to act quickly if the new measures fail to have the desired effect of creating a substantial increase in housing numbers in the UK."
As part of the new housing strategy, first-time buyers are being promised a new-build indemnity scheme to help get them onto the housing ladder, based on 95% loan to value mortgages for up to 100,000 prospective buyers.
Council of Mortgage Lenders director general, Paul Smee, says: "This scheme is good news for home-buyers, developers and indeed the UK economy. Lenders will be able to reduce the level of deposit needed by home-buyers in the new build sector, enabling more buyers to buy and so supporting the flow of new housing development, with all its positive consequences for jobs and the economy as a whole."
He adds: "UK lenders will not be compromising the quality of their lending or increasing their risk of loss through this scheme. It will, however, allow credit-worthy borrowers to obtain higher loan to value mortgages on new build properties, without requiring the level of deposit which has become usual in recent years."
Support for the private-rented sector comes in the form of a revision of taxes relating to bulk purchases of buy-to-let homes. An independent review is expected to ascertain whether or not there exists barriers to greater large-scale investment in the sector.
Jennet Siebrits, head of residential research for CBRE, says: "We consider the private rented sector to be a critical plank in the provision of housing supply and we are disappointed that the government's new strategy largely reiterates previous proposals that are currently underway. There have already been a number of independent reviews to analyse the barriers to large-scale investment in the private rented sector and what we need now is action."
She adds: "Our association with Aviva and its planned £1bn build-to-let fund and our mandate from Swedish residential fund Akelius to invest in standing residential investment stock illustrates that there is strong corporate appetite for private rented sector investment and we need to move quickly to build on this interest."
The government's new strategy comes as new research out today from the Home Builders Federation reveals that the average first-time buyer would have to save all of their remaining earnings after they've paid their rent for four and a half years to have a chance of getting a foot on the housing ladder.
The report, entitled, Broken Ladder 2, claims that in London it would take nearly a decade.
Back to news