Inside Housing’s Grant Britain Homes campaign won a major victory yesterday as chancellor George Osborne announced plans to invest more than £3 billion in building affordable homes.
Mr Osborne announced the £3.1 billion capital investment commitment in the spending review on Wednesday.
The news comes in the wake of four weeks of lobbying by the housing sector for continued grant funding to subsidise the development of sub-market rented homes.
The detailed breakdown of how much will be available in which years, what the grant rate will be, and how many homes could be funded had not yet been revealed. However Danny Alexander, chief secretary to the Treasury, is expected to unveil the details of plans to launch a second round of the government’s £1.8 billion affordable homes programme later today.
Sources close to the Treasury negotiations said Mr Alexander was likely to announce that the £3.1 billion would ‘primarily’ be grant funding for a three-year development programme.
The move comes a week after the Liberal Democrats’ deputy leader Simon Hughes delivered a letter outlining the housing sector’s calls into Mr Alexander’s hands.
GrantBritain Homes has won wide-ranging support from bodies such as the National Housing Federation, the Chartered Institute of Housing, the Confederation of British Industry, hundreds of social landlords, social and private tenants, private developers, homelessness charities, and politicians. More than 270 people have signed the online petition.
Housing bodies had been wrangling until the 11th hour over the grant rates and the level of conversions from social rent to affordable rent. It is understood the Treasury wanted this rise to increase landlords’ development capacity.
Much of the negotiations also revolved around the details of a long-awaited rent settlement that set the rent formula at the consumer price index plus 1 per cent for 10 years.
One source said: ‘It is about as close to a good news story as we could have hoped for. Politically there has been a shift in emphasis and it appears the Treasury has bought into the argument that it needs to invest in affordable housing.’
It is thought that communities secretary Eric Pickles, whose Communities and Local Government department suffered a 10 per cent cut to its 2015/16 budget, had originally bid for £1.3 billion a year of funding from the Treasury.
It was expected that some of the £3 billion would be used to pay for a rent to buy scheme which would be underpinned by equity loans.
The CIH said the funding was ‘encouraging’ but added the details were ‘critical’. It also welcomed the £2 billion a year local growth fund to be distributed by local enterprise partnerships.