Government agrees £300m affordable homes fund
The government has announced £300 million of capital funding to build 15,000 affordable homes as part of a series of measures designed to stem the slump in house building.
Prime minister David Cameron and his deputy, Nick Clegg, have unveiled measures designed to create up to 70,000 new homes and 140,000 jobs.
The plans include removing planning obligations that require affordable homes to be built on sites where the agreements are holding up the construction of market housing. The government said this will unlock 75,000 homes.
To compensate for the loss of affordable housing the Treasury is putting £300 million into building up to 15,000 affordable homes and bringing 5,000 empty homes back into use.
The government is also providing guarantees for £10 billion of loans for developers, and is promising 5,000 homes will be built for market rent.
A further £280 million is being put into the First Buy equity loan scheme to help first time buyers, which gives borrowers loans worth up to 20 per cent of the value of the property they wish to buy.
The prime minister also promised to crack down on planning departments that are holding up development, threatening to put the worst performers in ‘special measures’, and easing rules on building extensions.
‘This government is serious about rolling its sleeves up and doing it all it can to kick-start the economy,’ he said.
‘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 home building programmes this country has seen in a generation.’
David Orr, chief executive of the National Housing Federation, said: ‘This stimulus package is a major step forward. The government’s £10 billion financial guarantees, together with the extra £300 million for affordable and empty homes, has the potential to transform the housing market.
‘The only piece of the puzzle missing from this announcement is rapid access to public land.’
The plans are understood to have been finalised late yesterday. During the day sources told Inside Housing section 106 agreements requiring affordable housing to be built could have been suspended for a set period. The government appears to have backed down on this measure, instead opting for the removal of section 106 agreements on stalled sites.