Flint outlines action plan to 'ensure delivery' of new affordable housing » Housing » 24dash.com

New immediate measures designed to respond to the impact of the credit crunch on the housing market and maintain the delivery of new affordable housing, were announced today by Housing Minister Caroline Flint.

The measures are the first part of a wider package of action the Government will be announcing this month to increase confidence and help ensure stability and fairness in the housing market.

Today's announcements include:

• A further £270 million is today being allocated through the Housing Corporation to deliver an additional 3,800 homes for social rent and 1,500 shared ownership homes over the next three years. This will help to stimulate wider market activity and brings the total now allocated over the next three years to £3.6 billion out of the £8.4 billion total budget. This will drive forward delivery of our overall target of 180,000 affordable homes over the period.
• A new national clearing house is being set up where house builders can approach the Housing Corporation with robust proposals to sell their unsold stock for affordable housing. The Government has committed £200 million so far for affordable housing providers to purchase unsold stock from house builders, which can then be used for social or affordable housing. The clearing house will enable this resource to be invested as quickly as soon as possible, by giving developers greater certainty and an early steer on their chances of success.
• Increasing flexibility around when providers can bid for funding from the Government's £8.4 billion affordable housing programme. Providers will now be able to come forward with proposals for the Housing Corporation at any time, rather than waiting for the quarterly bidding round. This will enable the Corporation to increase the pace of approvals, to deliver desperately needed affordable housing, while also supporting developers.
• Increased funding flexibility so that the Housing Corporation will now have the option to offer more of the payment to housing associations and other developers delivering affordable and social housing at the start of schemes, helping to improve providers' cash flow, encourage new starts and stimulate wider market activity.
• The Government is today announcing the sixth round of the Housing Private Finance Initiative. Councils will be able to bid for a share of up to £1.87 billion to build new homes or refurbish existing houses and estates. The Government will be looking for bids that aim to shape strong and dynamic communities, not just build estates, and which make a real contribution to increasing local housing supply.

Housing Minister Caroline Flint said: "I am determined that we do everything possible to continue to promote stability and fairness in the housing market, and maintain our long term focus on increasing housing supply.

"There is an overwhelming case for building more housing and we must remain as ambitious as possible. But we also have to be flexible and responsive enough to adapt to the current economic climate. We have to acknowledge not only the difficulties faced by individuals and families, but by house builders too.

"My objective is to put together a package of the best possible proposals, working with industry and others to minimise the problems we currently face and create the conditions for a rapid recovery.

"That means providing more help for potential first time buyers, ensuring the delivery of affordable homes remains as high as possible and maintaining capacity so that house building increases as fast as possible when we begin the upturn.

"Without this, there is a real risk that when the market picks up again, which it will do in time, we will see another unsustainable property boom, making homes even more unaffordable for first time buyers and growing families."

Caroline Flint has tasked the Housing Corporation, English Partnerships and the team setting up the Homes and Communities Agency to work with the Government on proposals to stimulate the market, and increase confidence.

Today's measures are the immediate first steps. We are continuing to look at further options to help first time buyers and families who aspire to home ownership, and to support the minority of borrowers who may be facing difficulties at the moment.

The Government has already announced it is extending eligibility for its shared ownership schemes, so that households with an income of £60,000 or less can apply.

We are also providing an extra £9 million for debt advice, and extending free legal advice for all households at risk of repossession.

Responding to the proposals, London Councils’ Executive Member for Housing, Councillor Jamie Carswell said: “The measures announced today echo what many in the housing sector have long called for and will go some way to addressing the serious cash flow difficulties facing many house builders.

“Local authorities are also eager to play their part in delivering the homes vital for Britain’s future prosperity. Their innovation will be vital if the government is to deliver on its ambitions and build successful, sustainable communities.

“However, it is not simply a case of building more homes – we also need to address how we help more low and middle income families into the security of homeownership. In London, where stamp duty averages over £7,500, it represents a real barrier to families whose budgets are already stretched to bursting. Reducing this burden will be a great help.

“And as the credit crunch bites and the spectre of repossession stalks our communities, it is essential that we help families maintain their foothold on the housing ladder.

“London Councils is keen to open discussions between councils and registered social landlords to see can be done to combat this - perhaps by tailoring shared ownership schemes to prevent owner-occupiers facing repossession becoming homeless.

“And to help families continue moving up the housing ladder, councils, estate agents and RSLs could explore developing a ‘mortgage guarantee scheme’ to encourage families who are able to leave social housing to enter the private sector. This would result in even more families achieving greater financial security while also freeing up social housing for others.”

Shadow Housing Minister, Grant Shapps, said: "Gordon Brown keeps fiddling around the edges of the housing crisis without really getting to grips with the problem.

"Hard working families are suffering because Labour failed to put anything in reserve during the good times.Now the economy has hit a downturn it's those who want to get a decent roof over their heads who are feeling the pain.

“No one will be fooled by this. Gordon Brown would be far better off scrapping Stamp Duty for first time buyers on properties up to £250,000 and remove the red tape of HIPs. Under Labour moving home takes months instead of weeks."

David Orr, chief executive of the Federation, said: “Caroline Flint is raising the right issues.

"We absolutely agree that we need to be responsive and flexible in this difficult market, and we are glad that the Government is rethinking the way it funds affordable housing – as we recommended in the proposals we submitted to ministers a fortnight ago.

“We also welcome the latest allocation of £270m from the Government’s £8.4bn affordable housing programme, which demonstrates that housing associations are still doing their very best to meet their development targets in this difficult environment.

“Some of the homes currently being offered by private developers to housing associations are of insufficient quality for social housing – but we have every confidence that the new clearing house will ensure that all the homes sold on to associations are fit for purpose.”

Stewart Baseley, executive chairman of the Home Builders Federation, said: "Whilst welcoming any steps aimed at stimulating the housing market, today's announcement clearly is not enough.

"We have been warning Government for months now of the implications for the wider economy of not taking steps to address the situation in the housing market and the consequences of a lack of action are now becoming clear.

"The implications for the Government's own long-term housing targets are also clear, as it is only private house-builders that can deliver the... housing this country needs, both private and social.

"We will continue to work with Government on the further measures they mention in the hope that they will assist in bringing much-needed confidence and stability to the market."

Jim Rafferty, executive director of housing operations at Home - one of Britain's largest housing associations - said: "This is a robust and positive response to the difficulties currently faced by those seeking housing and housing providers in the current climate.

"We are especially pleased that this will increase the numbers of affordable rented housing to those in housing need and allow access to home ownership for families previously unable to get on the ownership ladder.

"However we would sound a note of caution to the Housing Corporation in that it is important that housing needs to be of the right type in the right location and of the right quality."