Coalition unveils ambitious plans to boost house building

23 Nov 2011

The Coalition Government has announced ambitious measures to kick start house building, help first time buyers get on the housing ladder and make social housing fairer.

The housing strategy has two main aims. First, to help drive local economies and create jobs. Unblocking the market will provide a much-needed boost to employment.

Secondly, these plans are designed to spread opportunity in our society. The Strategy will receive £400m of funding and will target those schemes that have stalled through lack of development finance. This will help to unlock the construction of 16,000 homes and support up to 32,000 jobs.

The strategy includes measure to help home buyers; help house builders; improve fairness in social housing; support the private rented sector; act on empty homes; support green housing; support older people to live independently; and extend Right to Buy while ensuring any social home bought is replaced.

It comes on top of a £500m Growing Places fund for development that Liberal Democrat Chief Secretary to the Treasury Danny Alexander announced earlier this month.

Liberal Democrat Housing Minister, Andrew Stunell said:

"The Liberal Democrats are determined to kick start the economy by getting houses built.

"But this hugely ambitious strategy won't just boost the economy, it will help first time buyers who are priced off the housing ladder, make social housing fairer, help to end the scandal of empty homes and boost green housing.

"These are things the Liberal Democrats have campaigned on for years and now we are delivering them in government."

The measures include:

Help for home buyers: At the heart of the strategy is a new build indemnity scheme that will give a helping hand for up to 100,000 prospective buyers who are currently frozen out of the housing market because of the need for large deposits. Under the proposals, homebuyers will be able to secure loans on newly built homes - the bedrock of the first time buyer market - with only a five per cent deposit.
Help for house builders: Assistance for people buying homes will be matched by support for the people who build them, from the largest house builder to people who want to build their own homes. Affordable housing providers are in line to share almost £1.8bn cash to develop new affordable homes. The first £1bn worth of contracts under the Affordable Homes Programme have just been confirmed, putting the Government on track to deliver up to 170,000 new affordable homes across the country over the next four years.
Improving fairness in social housing: Efforts to boost the supply of new homes and help homebuyers will be matched by improving fairness for those living in social homes. Measures in the strategy will support the radical programme of reform to the system for social housing that is already underway. The Government will consult on 'Pay to Stay' proposals. This will mean that those social tenants on high salaries, such as household incomes of over £100,000 a year, will pay up to market rents if they want to continue living in taxpayer-subsidised homes. Councils will be given new powers to reject applications for social housing from people who own a perfectly acceptable home of their own. And there will be stronger measures to help tackle the outrage of 50,000 unlawfully-occupied social homes - with a more detailed consultation to be published later this year.
Support for the private rented sector: The Strategy will also support greater investment in the private rented sector, a sector which accounts for around 16 per cent of all households. Large scale investment will be driven through changes to the tax rules affecting bulk purchases of buy-to-let homes, as well as through measures to encourage the growth of Real Estate Investment Trusts - the globally recognised model for real estate investment that provides low cost access to capital.
Action on empty homes: The Deputy Prime Minister has said that the fact that for years so little has been done to bring the nation's growing number of empty homes back into use is a "national scandal". Tackling the 700,000 empty homes across the country is a top priority in the strategy, and a key feature in the drive to increase the provision of affordable housing. Housing Associations and councils will be able to apply for part of £100m of Government funding to bring empty homes that blight neighbourhoods back into use. The money will be used for innovative housing schemes that will ensure empty properties that ruin neighbourhoods are lived in once again, communities are regenerated and at the same time more affordable housing is provided. Government is also announcing £50 million of further funding to tackle some of the worst concentrations of empty homes.
Supporting Green Housing: Providing incentives for landlords and homeowners to improve the energy efficiency of their properties through the Green Deal at no upfront cost, and renewing our commitment to delivering the Zero Carbon Homes standard by 2016, with an upgrade to building Regulations to get us halfway there in 2013.
Supporting older people to live independently: A package of measures will help the elderly adapt their homes, or move into alternative housing, to meet their changing needs. As part of this package the Government will work to develop simple and attractive financial products that help older home owners safely release equity that they can then use to maintain or adapt their homes.
Right to Buy: Supporting tenants by increasing the discount available under the Right to Buy, but with a clear commitment to replace every social home sold to ensure no loss of social housing.