The Government has announced it is investing £1.4bn in an effort to deliver tens of thousands of new affordable homes.
Chancellor Philip Hammond laid out his plans to help ‘just about managing’ families in today’s Autumn Statement and stressed the importance of tackling the housing crisis.
The extra investment – in addition to the £4.7bn fund already set aside for building affordable homes – will help the delivery of an estimated 40,000 houses.
‘The government will relax restrictions on grant funding to allow providers to deliver a mix of homes for affordable rent and low cost ownership, to meet the housing needs of people in different circumstances and at different stages of their lives,’ Mr Hammond explained.
‘The NPIF [National Productivity Investment Fund] will provide an additional £1.4bn to deliver an additional 40,000 housing starts by 2020-21.’
Mr Hammond also said a new Housing Infrastructure Fund of £2.3bn by 2020-21 will be created. It will be funded by the NPIF and allocated to local government on a competitive basis. He estimated it would deliver up to 100,000 new homes.
The Government will also invest £1.7bn by 2020-21 to speed up house building on public sector land in England and it will fund a large-scale regional pilot of the Right to Buy for 3000 housing association tenants.
John Healey MP, Labour’s shadow secretary of state for housing, said: ‘Six years of Conservative housing policy have led to the lowest level of new affordable house building in 24 years. Today’s announcement is too little and too late.’
He said it was ‘too little’ to make up for the cuts in housing investment since 2010, and ‘too late’ to rescue what he characterised as ‘failing’ flagship policies, such as Starter Homes.
The chief executive of the think tank Localis, Liam Booth-Smith, welcomed the fact that the new investment comes with ‘fewer strings attached’.
‘The £1.4bn injection into the Affordable Homes Programme is good news. Housing associations, developers and councils will be able to bid for a larger pot of money to fund new affordable housing,’ he said.
‘Whilst the cash figure will get the headline, the bigger change is that the grant funding will come with fewer strings attached than previously. Bidders will be able to use it to build homes for affordable rent, not just shared ownership and Rent to Buy as was the case in the previous prospectus.’
Despite Localis’ enthusiasm for the new investment, it still warned it was ‘a drop in the ocean’.