£3.5 billion deal to build homes and drive local growth
Eric Pickles welcomes a new multi-billion pound investment package to build thousands of homes, drive economic growth and create local jobs.
Mr Pickles said the government was determined to support businesses and the housing sector, and the new spending commitments announced today. These include funding for more affordable homes, measures to release swathes of land for development and support for aspiring homeowners to get Britain building, helping hardworking families and supporting local economies.
Affordable Housing
At the heart of today’s package is a £3.3 billion programme to deliver thousands of new affordable homes across the country. From 2015 the Homes and Communities Agency and the Greater London Authority will work with housing providers to build 165,000 affordable homes over 3 years, creating thousands of jobs. This is the fastest annual rate of building for at least 20 years.
The extra investment means that the government will start construction of up to 200,000 new affordable homes in the 4 years from 2014-15, delivering more new build affordable homes than the previous government completed in any 4 year period.
Social landlords will benefit from the certainty and stability of the new rent policy announced yesterday. The deal will see rent levels increase by CPI + 1% a year for 10 years from 2015. This provides the sector with the longest period of certainty it has ever had, giving landlords the confidence to plan long term housing development.
Mr Pickles said the funding from government was a good deal for the sector, levering in private investment to construct the new homes and building on the highly successful Affordable Homes Programme, which is on track to deliver 170,000 homes by 2015.
The government will also introduce the new Affordable Rent to Buy scheme. This £400 million programme will provide funding for new build homes to be let to tenants at affordable rents for a fixed period of time, allowing them to save for a deposit. At the end of this period, the sitting tenant will get first option to buy the home and achieve their aspiration of home ownership.
Mr Pickles believes this groundbreaking scheme will give families the stability they need to step on to the housing ladder.
Eric Pickles said:
This government is determined to keep Britain building and rebalance the economy so we achieve strong lasting growth and widely shared prosperity.
In stark contrast to the years of inactivity under the last government, today’s deal will continue our progress on delivering thousands of new affordable family homes across the country.
We are determined to make the most of every single square inch of previously-used land available and accelerate the rate of housebuilding. Getting stalled sites up and running and speeding up the release of public land is crucial to this, and will ensure we build more homes where people need them.
Our investment in new housing is the bold action that’s needed, and will go hand in hand with extra funding for local enterprise partnerships, so they can build on their success, create thousands of jobs and inject millions of pounds of investment into local economies.
Other measures in today’s Spending Review include:
£102 million to get stalled housing sites moving again, accelerating the construction of thousands of new homes. Targeted investment of this kind has already delivering 42,000 homes on sites across the country.
Steps to speed up the release of formerly-used public sector land. Enough land to build up to 100,000 homes has already been identified, and to date land for up to 47,000 new homes has been sold. The Chancellor has now introduced new rules to make it easier for government departments to release land and assets, and the Homes and Communities Agency will manage and speed up the process, so more land can be brought forward for development.
A further £160 million investment in the Decent Homes programme, targeted at those councils with the biggest backlogs of repairs. Since 2010 £1.6 billion has been allocated to improving the nation’s social homes through the Decent Homes programme, with the programme now 97% complete.
A £2 billion funding pot for local enterprise partnerships to drive forward job creation and investment in their areas, including £1 billion for transport and £500 million for skills and training. The funding will build on the billions of pounds already invested, and will include £400 million from the New Homes Bonus, locally pooled to support housing and local growth.
£50 million for the Local Infrastructure Fund and a fund of £100 million in 2014-15 for enterprise zones.
Further information
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At Budget this year the government published the response to Lord Heseltine’s Review of local growth, committing to create a Single Local Growth Fund, including elements of housing, skills and transport. Funding streams of over £2 billion will be transferred into the Single Local Growth Fund for 2015-16 and a further commitment to at least £2 billion for the fund in each year of the next Parliament.
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The £2 billion funding pot for 2015-16 will include £1 billion from the Department of Transport, £500 million for new skills and training, and £400 million through the New Homes Bonus, £250 million from DCLG DEL and £150 million comes from LG DEL.
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The government has also confirmed that it would continue to support the New Homes Bonus to the tune of £250 million per year. So of the £400 million New Homes Bonus funding being allocated to the Single Local Growth Fund, £250 million will come from central government.
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