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UK govt announces details of £7 billion house building priority programme

by International Commercial Investment on November 25, 2015

Source: Propertywire.com

The UK government has announced a £7 billion programme to make house building a priority which includes more than 400,000 affordable homes.

Chancellor George Osborne called it the biggest affordable housing programme since the 1970s when he made the announcement as part of his Autumn financial statement.

It will include £2.3 billion paid directly to developers to build 200,000 starter homes aimed at first time buyers. They will be offered at a 20% discount on prices up to £450,000 in London and £250,000 across the rest of the country.

He also announced £200 million for 10,000 new homes that tenants can live in for five years at reduced rents while they save for a deposit. They will then have the first right to buy the home.

Then there will be £400 million to help build 8,000 specialist homes for older people or those with disabilities, the Chancellor also confirmed.

But not all of this is new. The starter homes package has already been flagged up and it is well known that the government wants to build millions of home in the next five years.

Nevertheless the programme has been widely welcomed, although concerns have been expressed about the focus on home for sale, although the new homes that tenants can buy after five years will also be welcomed.

Among those concerned about the lack of help for the rented sector is Adam Challis, head of residential Research at JLL. ‘The Chancellor’s support for 400,000 new affordable homes is welcomed at a time when there is a dire need to expand housing construction right across the country,’ he said.

‘This Government’s narrow focus on home ownership is a serious concern however. Support for the private rented sector and social housing is vital to protect the financial stability of millions of households, for whom ownership is beyond reach,’ he pointed out.

‘The private rented sector is the fastest growing tenure in the UK and deserves direct support through the planning system and through the release of public land. Social housing investment provides vital security to more vulnerable households, while also reducing the heavy current reliance on temporary accommodation,’ he explained.

‘Housing delivery desperately needs long term planning rather than short term interventions. They are disruptive to construction programmes and ultimately weaken the system of delivery. Housing should be viewed as infrastructure that protects household stability and supports economic growth,’ he added.

Developers will welcome the announcement by the Government of funding for new housing including starter and shared ownership homes, according to Claire Fallows, partner at Charles Russell Speechlys.

‘Questions remain, however, as to whether local authorities will continue to insist on the provision of social and affordable rented units on larger housing sites and, if so, whether Housing Associations will have the funding available to acquire those units. Flexibility by authorities will be required to ensure that housing delivery is not stalled,’ she said.

International Commercial InvestmentUK govt announces details of £7 billion house building priority programme