£12bn boost for affordable homes unveiled by Housing Secretary

£12bn boost for affordable homes unveiled by Housing Secretary

Housing Secretary Robert Jenrick launches new investment in housing to help the country build back better, including homes for social rent to help the most vulnerable.

On the 8th September Housing Secretary Robert Jenrick announced that the prospectus inviting bids for the Government’s massive investment in affordable housing and new measures to make it easier to get a foot on the property ladder are being launched this week.

In total, the new programme represents the highest single funding commitment to affordable housing in a decade.

The £12.2bn overall investment in affordable housing was confirmed at Budget, which also includes £700m on new homes through the 2016 to 2022 programme.

A new £11.5bn Affordable Homes Programme will be delivered over five years from 2021 to 2026, providing up to 180,000 new homes across the country, should economic conditions allow.

The programme will unlock a further £38bn in public and private investment in affordable housing. New homes will be made available from next year.

The Government is announcing that around half of the new homes will be available for affordable home ownership, helping more people to get a foot on the housing ladder.

In order to support people from all backgrounds, the rest will be made available for discounted rent, including 10% for supported housing — to support those with physical or mental health challenges.

Nearly £7.5bn will be delivered outside London by Homes England, the Government’s housing accelerator. This is over £2bn more than the amount given under the previous Affordable Homes Programme, underlining government’s commitment to levelling up the whole country.

The Greater London Authority has been offered £4bn and negotiations about what they will deliver with this funding are in progress.

Affordable Homes prospectus
Homes England will publish its Affordable Homes Programme prospectus this week, inviting councils, housing associations and private providers to start preparing their bids. New homes will be delivered from next year.

Housing Secretary Rt Hon Robert Jenrick MP said: “The announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better.

“This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

“Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership.”

As well as delivering homes for affordable ownership, the new programme will deliver homes for Affordable and Social Rent. Funding for Social Rent, which is typically 50 to 60% of market prices, will be available to housing providers across the country, providing secure, affordable housing to families who need it most.

Shared Ownership

The Housing Secretary is also announcing a new model for Shared Ownership to help more people onto the property ladder by vastly reducing the minimum initial share, and launching a consultation to ensure new homes deliver the accessibility that families need.

The new Shared Ownership model will:

  • reduce the minimum initial share you can buy in a property from 25% to 10%
  • allow people to buy additional shares in their home in 1% instalments, with heavily reduced fees
  • introduce a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance

A Right to Shared Ownership will be available on the vast majority of rented homes delivered through the new programme, providing tenants with a pathway into ownership by giving them the right to purchase a stake in their home.

Additionally, the Housing Secretary has also launched a consultation to consider how best to raise accessibility standards for all new homes in recognition of the importance of suitable homes for older and disabled people.

Unique opportunity
Nick Walkley, Chief Executive of Homes England, commented: “We welcome the launch of the new Affordable Homes fund, which gives Homes England a unique opportunity to work on behalf of the government to accelerate the delivery of high-quality, affordable homes.

“The fund will support improved productivity in construction and unlock new economic opportunities across the country. Despite the challenges of COVID-19, this long-term funding settlement gives our partners the confidence they need to invest in new homes and the communities they work for.”

The announcements follow proposals unveiled last month to overhaul the country’s planning system, including a new system of developer contributions to ensure firms play their part in funding affordable homes.

A new Infrastructure Levy has been proposed that would deliver more funding for affordable housing, including at least as many affordable homes as the current system.

Give councils the powers to deliver more social homes
Responding to the Housing Secretary’s announcement of the Government’s Affordable Homes Programme, Cllr David Renard, Local Government Association Housing Spokesperson, said: “It is good the Government has acted on our call to bring forward the Affordable Homes Programme. It is also positive that the Government is consulting on how homes can be made more accessible for older and disabled people, which we have previously said should be key components of our mission to build new homes.

“With more than one million households on council housing waiting lists, it is vital that we build more housing for social rent, and we look forward to seeing more clarity around how this will be delivered.

“This is why we are calling for councils to be given the powers and tools to deliver a programme of 100,000 social homes a year, which would not only meet a third of the Government’s housing target, but reduce homelessness, get rough sleepers off the streets and support people’s wellbeing. This includes reforming Right to Buy and allowing councils to keep receipts in full and set discounts locally.

“In addition, we would like to see the programme go further and allow councils to combine Right to Buy receipts with funding from the programme to deliver more housing.”

HAs need certainty and confidence
Kate Henderson, Chief Executive of the National Housing Federation, said: “With the critical need for decent affordable homes further exacerbated by the coronavirus crisis, it is welcome that the Government has announced a funding programme that includes money for social rent. These are the most affordable type of homes for people, typically 50% of market rent.

“Putting social and affordable rent on an equal footing with affordable homeownership is particularly positive; meaning we can build homes for those on the lowest incomes such as key workers. It is also great to see funding for supported housing — such as homeless and domestic abuse shelters and older people housing — as this has been invaluable in keeping people safe during the pandemic.

“We welcome a focus on shared ownership to help people onto the housing ladder; however there are some questions and risks in the new proposed model, that may make it harder for housing associations to build in the current climate. What we need from government to shore up investment is certainty and confidence, and some of the proposals for shared ownership and the introduction of the Right to Shared Ownership may have the opposite effect.”

An injection of much needed funds
Kush Rawal, Director of Residential Investment at Metropolitan Thames Valley commented: “We welcome the confirmation of details of the new Affordable Homes Programme, which injects much needed energy and funds into the sector, especially for shared ownership customers and those wishing to own their own home.

“In 2017 we introduced 1% staircasing through So Resi Plus, so we are delighted that the Government have acknowledged the benefits it offers by making it a part of the new model for shared ownership. So Resi Plus has been transformative for our customers, with four times as many customers staircasing each year via this route than do so through traditional share purchases of 10% or more. Historically, restricting staircasing to larger shares has been a barrier for customers, so we welcome this move and further steps to reduce the costs of staircasing transactions.

“We passionately believe in the power of shared ownership as a key part of the affordable housing mix and want to see the number of shared ownership homes massively increased. Understanding and discussing with government the details of how the Right to Shared Ownership and the new 10-year leases covering repairs will operate will be crucial, as we must ensure that these measures support our shared aspiration to build more affordable shared ownership and affordable rented homes.”

Header image ©Brian Jackson/AdobeStock.

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