MHCLG can only account for 5% of 713,000 homes expected to be built on land it unlocked, NAO finds

The findings come as part of the spending watchdog’s latest report, Unlocking land for housing, which examined whether MHCLG’s programmes to increase the supply of suitable land for housing development are supporting the government’s ambition of delivering 1.5 million new homes by July 2029.

These programmes involved MHCLG, Homes England and other delivery partners intervening on sites to remove the barriers that mean the site is not profitable or attractive enough for the market to develop without government help.

Through a variety of programmes since 2016-17 utilising different funding types, including grants, loans and equity investments, MHCLG and Homes England have so far committed £8.4bn of the £10.5bn allocated funding to projects, of which £5.7bn has been spent.

This cash has funded work on 768 sites and has supported a broad range of projects. However, MHCLG’s funding only provides a portion of the funds to unlock a site, and is designed to help encourage others to invest in the site to fully unlock it for housebuilding.

MHCLG and Homes England have been reviewing how their land-unlocking programmes work.

This includes changing how they work with local areas and developers, using continuous market engagement processes to allow bids to come forward when they are ready rather than meeting fixed application windows.

They have also changed how they assess projects, for example by looking at whether a project supports deprived communities or has environmental benefits.

The NAO reports that a lot of the legacy activity will still be ongoing when MHCLG launches the National Housing Delivery Fund (NHDF), and recommends that it, alongside Homes England, ensures that this activity continues and delivers its intended benefits.

The NHDF will be rolled out in April to provide a single gateway for the government’s financial support under the new National Housing Bank.

Gareth Davies, head of the NAO, said: “The success of the new National Housing Delivery Fund will depend on government setting clear ambitions and priorities for investment alongside its approach to risk management, so that public spending genuinely helps unlock the homes the country needs.”

For the NHDF to be successful, the NAO is calling on the government to set out clear expected impacts, and to agree with its delivery partners the measurement of site progress.

The government needs to establish long‑term evaluation and monitoring to generate timely evidence from both legacy programmes and early NHDF activity, to improve understanding of what interventions are likely to succeed.

Funding priorities for the NHDF also need to be clarified, alongside the adoption of a clear risk appetite and management approach across MHCLG, Homes England and delivery partners to support consistent delivery across the NHDF portfolio.

Tom Hunt, chair of the LGA’s Inclusive Growth Committee, said: “Our communities desperately need new homes, and programmes within the National Housing Delivery Fund will help deliver the land and homes needed.

“To truly maximise the number of new homes brought forward through the National Housing Delivery Fund, councils should be given access to the £2.5bn in low-cost loans made available in the National Housing Bank.

“Local government looks forward to working with central government and other key delivery partners – councils are highly adept at delivering homes on small sites, so supporting them to deliver, for instance through continued Brownfield Land Release Funding for unviable sites, accessible to all councils, would deliver more homes at pace.”

In response to the NAO report, an MHCLG spokesperson said: “The NAO report rightly recognises that government support is essential to unlock land on which homes would otherwise not be built.

“While tens of thousands have already come forward, we know that on the most complex sites this can take time and there’s more for us to do.

“But we’re pulling every lever to tackle the housing crisis, including overhauling the planning system, committing billions in new funding and reinstating local housing targets to help build 1.5 million new homes.”