Housing strategy to be backed by £400m fund
David Cameron and Nick Clegg will today unveil a £400 million fund to kickstart development schemes which have stalled due to lack of finance.
The prime minister and his deputy will unveil the coalition government’s long awaited housing strategy this morning during a visit to a construction site owned by Linden Homes, a subsidiary of house builder Galliford Try, in Guildford, Surrey. A statement to parliament will follow and the full strategy document will be available on government websites after 9.30am.
The £400 million ‘Get Britain Building’ fund will allow 16,000 homes to be built, of which 3,200 will be affordable, the document will say.
The fund will invest in ready-to-go construction sites that satisfy government criteria and the Communities and Local Government department expects to issue a prospectus for the first round of bids by the end of the year.
‘The problem that we have is that lenders aren’t lending, builders aren’t building and people can’t get their deposits together to buy, so we’ve got a triple problem in the housing market.’
Housing minister Grant Shapps
Developers will compete for the funds to ensure taxpayer cash is invested in projects that will deliver the best value for money. By targeting ready-to-go projects the government hopes the fund could provide the means to have diggers on-site by the end of July next year
In the foreword to Laying the Foundations: a housing strategy for England, the prime minister and deputy prime minister say: ‘This is a radical and unashamedly ambitious strategy – and it has two main aims. First, to help drive local economies and create jobs. Unblocking the market will provide a much-needed boost to employment.
‘Second, these plans are designed to spread opportunity in our society. For too long, millions have been locked out of homeownership. We want to build an economy that works for everyone, one in which people who work hard and play by the rules can expect to own a decent home of their own. This goes right to the heart of what this government is about.’
The document will also include a mortgage indemnity scheme for first-time buyers.
This will see the government underwrite some lending costs, reducing first-time buyers’ deposits to around 5 per cent.
Paul High, managing director of Orbit Homes, the largest Homebuy agent in the UK with 12,000 applications last year, welcomed the announcement.
He said: ‘Getting finance has been a major issue for people so anything which can help tackle this and stimulate the market is to be welcomed.
‘We need to see the detail but it sounds positive.’
David Cowans, chief executive of Places for People, said: ‘We welcome this strategy the financial measures such as underwriting mortgages for first-time buyers, releasing public land, and extending the right to buy, as long as the receipts are spent on new house building.’
The document is also likely to contain detail about the revised right to buy scheme, including details about increased discounts that are expected to be as high as 50 per cent.
Other announcements expected in the document include plans to force high earners living in social housing to pay market rents, moves to criminalise subletting of social housing, and more detail on plans to release public sector land for house building.
Grant Shapps, housing minister, told the BBC: ‘The problem that we have is that lenders aren’t lending, builders aren’t building and people can’t get their deposits together to buy so we’ve got a triple problem in the housing market.
‘What we want to do is make it easier for first-time buyers… who say the biggest problem we have is the amount of deposit that we have to get together - that is their biggest blockage.’