Treasury's £3 billion for 165,000 affordable homes

Danny Alexander, chief secretary to the Treasury, told the House of Commons that the extra capital would be provided over three years from 2015, adding further details to yesterday’s spending round by George Osborne. 

He said the details of planned government expenditure from 2015/16 were ‘the most ambitious and significant investment in affordable housing for a generation’.

Mr Alexander added that the £3 billion funding for 165,000 new affordable homes would provide, on average, more homes each year than in any of the last 20 years.

The grant rate per home will fall from an average £22,000 a home under the affordable homes programme to around £18,000 a home.

Mr Alexander said that the government would also fund over 2,500 more new homes for older and disabled people and £160 million for decent homes, mainly in London.

But David Orr, chief executive of the National Housing Federation, said that the £3 billion figure ‘is in reality a further disappointing cut in subsidy and won’t deliver the ambitious house building programme we need.’

While Grainia Long, chief executive of the Chartered Institute of Housing, said its call for the government to make housing part of the UK’s infrastructure has been answered.

‘Housing has rightly been recognised as a national priority,’ she added.

Mr Alexander said that the government would also raise £5 billion from land and property sales, with assets that are no longer needed being sold ‘at a fair price.’

‘Too often, local and national government sits on an area of land which could be put to good use for the economy, housing or schools,’ he said.

He said that, unless ministers can be convinced the site is needed, the site would be sold and the proceeds used ‘to pay down our debt, and to invest in our economy’.

Mr Alexander also confirmed that social landlords will be able to increase rents by the consumer price index of inflation plus 1 per cent for up to 10 years, which he called ‘the longest period ever’.

The NHF’s Mr Orr said he looked forward to hearing more on how sales of publically-owned land would be distributed and the fine detail of long-term rents will ‘operate in practice if it is to enable housing associations to plan with confidence.’