Budget: £150m loan fund for regenerating housing estates

Mr Osborne said in the Budget that the fund would regenerate housing estates across the UK and the Budget document showed that the fund would offer £150 million of loans which it says will ‘boost housing supply.’

Along with the Cambridge City Deal, a spokesman for the Treasury said that this would deliver more than 40,000 homes.

The document said bids will be invited ‘shortly’ from developers and there has been expressions of interest from the Greater London Authority relating to the Aylesbury Estate, Blackwell Road and Grahame Park regeneration projects.

Tonia Secker, housing and regeneration partner at law firm Trowers & Hamlins, said: ‘The chancellor has referred to the establishment of a £150 million fund to kick-start the regeneration of large housing estates through repayable loans from private sector developers. It’s unclear as to what aspects of estate regeneration the fund is intended to address, and we look forward to seeing the detailed proposals for this area of housing, which has struggled to receive investment in recent years.’

The Budget document also includes an announcement about a right to move consultation for social tenants to ‘increase their mobility for work related reasons’. It said options will include: giving tenants priorit when a new social home becomes availabele and setting aside a pool of vacant lets to enable them to move across council boundaries.

The Budget also included an announcement that a prospectus on garden cities would be published following the announcement of the 15,000-home Ebbsfleet garden city announcement on Sunday. No date was given for when this would be published in the speech, however the Budget document clarifies that this will be published by Easter 2014. It says this will set out how ‘local authorities could develop their own, locally-led proposals for bringing forward new garden cities’.

Mr Osborne said that the increase in house building is ‘not enough’ and announced an extra £150 million for the ‘right to build’ self build fund. The Budget said this would give builders ‘a right to a plot from councils’ and says the fund will provide up to 10,000 serviced plots for custom build. It also said the government is also looking to make the help to buy equity scheme available for custom build.

A £500 million builders finance fund for small house builders was also announced. The Budget document said these loans would allow ‘developers to unlock 15,000 housing units stalled due to difficulty in accessing finance’.

Grainia Long, chief executive of the Chartered Institute of Housing, said: ‘We have been calling for government to introduce measures to support SME builders to increase the role they can play in addressing our national housing crisis. Following the credit crunch small builders have found it more difficult to access finance and government moves to help them get building by providing £500 million of support are welcome’.

She added that the CIH is disappointed that the chancellor ‘did not choose to use the tax system to incentivise standards in the market rented sector.’

‘This sector is the fastest growing of all tenures it is vital that we take steps to ensure more consistent standards,’ she said.

‘For many people living in the market rented sector quality and standards are too often left too chance.  Changing the tax system would reward landlords for doing the right thing, whilst not costing the government any additional money.’

Mr Osborne also spoke about the development of new homes in Barking Riverside, up to 11,000 new homes, and a regeneration of Brent Cross.

He announced a stamp duty of 15 per cent will be imposed on people buying residential homes through a commercial envelope.

David Orr, National Housing Federation chief executive, branded the Budget a ‘missed opportunity’.

‘We welcome the chancellor’s focus on housing and the announcement of a new garden city, but we think the Budget is a missed opportunity,’ he said.

‘Measures like help to buy are likely to stimulate demand for housing but the Budget does not go far enough to boost the supply of homes needed to meet that demand.’ 

He said of increasing supply: ‘While he has taken some steps - like a new garden city - to increase supply, we were disappointed that he did not include measures to deliver homes more quickly, at little or no cost to the tax-payer.

‘An effective release of public land for house building, increasing the borrowing capacity of housing associations and extending government guarantees to back financing for new development, would all have made a significant and immediate boost to the supply of affordable homes.’

The Budget document committed to publishing the results of the zero carbon homes consultation ‘shortly’.

£140 million of funding was announced for flood defence repair, however the British Property Federation expressed concern about the remaining Flood Re insurance policy.

LIz Pearce, chief executive of BPF, said: ‘We are pleased to see that the government is committed to spending on flood defences and helping those that have been hardest hit by the recent storms, but today’s announcement of £140 million funding to repair flood defences do not assuage our fears about the government’s new flood insurance scheme, Flood Re, which currently stands to expose thousands of homeowners to rocketing insurance premiums.

‘As things stand, the scheme will prevent one-third of homes from accessing affordable buildings insurance, and we would like to see an extension of the scheme cover larger leasehold blocks of over three properties, the private rented sector and small businesses to ensure that where defences do fail, they still have the security blanket of flood insurance to help them on the road to recovery.’