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Government announces £3bn affordable housing guarantee scheme
Chancellor Philip Hammond has announced that the government will create a £3bn Affordable Homes Guarantee Scheme aimed at supporting the delivery of about 30,000 affordable homes.
Presenting his Spring Statement to the House of Commons today, Mr Hammond said housing, along with the environment, was one of the government’s top priorities.
No more details on the guarantee scheme were immediately available, but a previous scheme allowed the government to underwrite housing association borrowing to lower its cost.
This scheme, run by the bond aggregator The Housing Finance Corporation, frequently saw providers borrowing at below 3% to build affordable rented homes.
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But this scheme’s previous Affordable Homes Guarantees Programme was scrapped in 2015 after the Treasury chose not to extend it. Housing associations had been consistently able to borrow at less than 3% through it, with some agreeing deals at less than the cost of government borrowing, and the decision to scrap the programme was widely criticised.
A return of the scheme had been hinted at in the Autumn Budget in 2017, when the government confirmed that an £8bn pot for financial guarantees to support private housebuilding and the private rented sector could be extended to affordable housing.
Sector figures welcomed the announcement, but also warned more grant funding was required – particularly with the threat of a no-deal Brexit looming.
James Prestwich, head of policy at the National Housing Federation, said: “We welcome the announcement of a £3bn guarantee scheme, which we called for in the autumn. It will help housing associations borrow more cheaply and therefore build more homes. However, while this is an important contribution, we desperately need new money in the next spending review to build more social housing.
“This is more crucial than ever in the midst of Brexit uncertainty – the lack of affordable housing is now pushing hundreds of thousands of working families to the brink – the number is rising year on year, many are living in debt at threat of eviction or homeless.”
Paul Hackett, chair of the G15 and chief executive of Optivo, said: “Brexit uncertainty and the deepening UK housing crisis underlines the need for longer-term funding for affordable housing.
“The new funding announced today for the affordable homes guarantee programme is welcome, but our sector’s cross-subsidy model of delivering affordable housing is broken and a new funding deal is imperative if the government wants to hit its target of 300,000 new homes a year.”
Mr Hammond also announced that the government would make £717m available from the Housing Infrastructure Fund to “unlock” 37,000 homes in west London, Cheshire, Didcot and Cambridge.
More on the Spring Statement 2019
The Spring Statement: what you may have missed
The documents accompanying the Spring Statement contained some important housing announcements that may have been overlooked, explains Jules Birch
Government announces £3bn affordable housing guarantees scheme
Chancellor Philip Hammond has announced that the government will create a £3bn Affordable Homes Guarantees Scheme aimed at supporting the delivery of about 30,000 affordable homes.
Guarantees welcome but more grant needed, sector says
Sector leaders have welcomed the announcement that the Affordable Homes Guarantees Scheme will be restarted – but warned that the government must provide more grant
Chancellor unveils infrastructure funding to boost housing in Spring Statement
The government has announced that £717m will be made available from the £5.5bn Housing Infrastructure Fund to unlock up to 37,000 homes
