Government offering £10bn and relaxation of rules to boost housebuilding

Published by 24publishing for 24dash.com in Housing and also in Central Government, Development, Finance

The Government has announced a raft of new policies to create new homes and jobs, including a £10bn loan guarantee scheme for housing associations which aims to reduce borrowing costs.

The coalition also set out its intentions to slash red tape across the planning system to speed up and increase construction. It is also providing £300m in capital funding to build 15,000 new affordable homes and bring 5,000 empty homes back into use.

Somewhat controversially, it has also backed plans - recommended in the Montague review - to relax rules on developers to provide affordable housing on stalled schemes, which it hopes will deliver up to 75,000 new homes.

A £10bn loan guarantee scheme - which aims to reduce the cost of borrowing for housing associations and developers - is part of a wider £40bn package aimed at creating infrastructure and new jobs.

Prime Minister David Cameron said: “The measures announced today show this government is serious about rolling its sleeves up and doing all it can to kick-start the economy. Some of the proposals are controversial; others have been a long time in coming. But along with our Housing Strategy, they provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation."

The Government also announced a £280m extension of its 'FirstBuy' scheme, which offers first time buyers a deposit for their home. For a limited time there will be a relaxation of rules governing home improvements such as extensions, which it is hoped will help to boost the economy.

Deputy Prime Minister Nick Clegg said: "Today’s major boost to housing and planning will make it easier to build a home, easier to buy a first home and easier to extend a home.  A boost that will get Britain building again. Building thousands of affordable homes and generating thousands of new jobs.”

David Orr, chief executive of the National Housing Federation, which represents England’s housing associations is pleased with the Government's plans. He said: “This stimulus package is a major step forward. The Government’s £10 bn financial guarantees, together with the extra £300 million for affordable and empty homes, has the potential to transform the housing market.

“It will provide homes for some of the millions of families on waiting lists, create jobs and give the UK economy a shot in the arm with a speed and effectiveness few industries can match. The only piece of the puzzle missing from this announcement is rapid access to public land.

“Government departments are sitting on parcels of previously developed public land equivalent of two cities the size of Leicester – this land needs to be made available so that housing associations can get cracking, build more homes at scale, boost the supply of affordable homes and create local jobs.”