Laying the Foundations
posted on 21/11/2011 16:45:00, updated on 21/11/2011 16:45:00
The government has published a new housing strategy, Laying the Foundations: A Housing Strategy for England. The strategy is aimed at boosting the housing market.
The strategy announces initiatives to increase housing supply, including:
- a scheme to provide up to 95% loan to value mortgages for new build properties in England, backed by a housebuilder indemnity fund, whereby the government and homebuilders will provide security on loans taken out by first-time buyers for new homes, so if the house is sold on for less than the outstanding mortgage total, the lender will be able to recover their loss
- a new £500 million Growing Places Fund which will support infrastructure that unblocks housing and economic growth
- a new £400 million ‘Get Britain Building’ investment fund, which will support building firms in need of development finance
- freeing up public sector land with capacity to deliver up to 100,000 new homes, and offering developers a ‘build now, pay later’ incentive, under which they can pay for the land after homes have been sold if they do not have the finance to buy the land upfront
- supporting and encouraging more individuals to build their own homes through a Custom Homes programme, with up to £30m of new funding to support provision of short-term project finance on a repayable basis
- an independent review of the barriers to investment in private homes to rent
- supporting new 'build to let' models of development, where homes are built specifically for the private rental market, with funding from investors with a medium to long term interest.
Changes to the right to buy
The strategy includes details on reforms of the right to buy scheme for social housing tenants, first announced at the Conservative Party conference. Discounts are to be increased substantially, to make the right to buy more attractive to buyers, and the government intends that for every additional home bought under the right to buy, a new 'affordable rent' home will be built.
The government will consult on how to ensure delivery of the replacement homes. The strategy sets out three possible models:
- local delivery – where receipts are left with the council for reinvestment locally
- national delivery – where receipts are allocated through a national programme administered by the HCA
- combined approach – where councils able to deliver one-for-one replacement and secure good value for money in commissioning retain the receipts, while those who prefer not to lead on commissioning replacement surrender receipts for national distribution.
Social housing reform
The strategy also sets out proposals to ‘improve fairness’ for those living in social housing.
These include consulting on a ‘pay to stay’ system, which would involve higher-paid social housing tenants having to pay up to market rents if they want to remain in their homes.
Councils will also be given powers to reject applications for social housing from people deemed to already own a ‘perfectly acceptable’ home of their own, and the government will also consult on how to address the estimated 50,000 unlawfully occupied social homes.
The government has introduced a new Affordable Rent product which gives social landlords the flexibility to charge rents of up to 80% of local market levels, on both new properties and a proportion of re-lets, as part of an agreement to build new homes. This provides additional financial capacity to deliver more new housing than would otherwise be possible.
The government is also making changes to social housing tenure, local authority homelessness responsibilities and allocation requirements through the Localism Act 2011.
Annex A to the strategy sets out an action plan and milestone dates for the various initiatives.