William Eichler 08 September 2020

Council chiefs welcome £12bn affordable housing fund

Local authority leaders have welcomed the Government’s affordable housing funding announcement, but called for more powers to deliver social homes in their local areas.

The £12.2bn investment in affordable housing was confirmed at Budget, which also includes £700m on new homes through the 2016 to 2022 programme.

A new £11.5bn Affordable Homes Programme will be delivered over five years from 2021 to 2026, providing up to 180,000 new homes across the country.

The Government argues that the programme will unlock a further £38bn in public and private investment in affordable housing, with new homes being made available from next year.

Housing secretary Robert Jenrick, who announced the funding today, said that around half of the new homes will be available for affordable home ownership. The rest will be made available for discounted rent, including 10% for supported housing.

‘Today’s announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better,’ said Mr Jenrick.

‘This Government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

‘Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership.’

As well as delivering homes for affordable ownership, the new programme will deliver homes for Affordable and Social Rent. Funding for Social Rent, which is typically 50 to 60% of market prices, will be available to housing providers across the country.

Nick Walkley, chief executive of Homes England, commented: ‘We welcome the launch of the new Affordable Homes fund, which gives Homes England a unique opportunity to work on behalf of the government to accelerate the delivery of high-quality, affordable homes.

‘The fund will support improved productivity in construction and unlock new economic opportunities across the country. Despite the challenges of Covid-19, this long-term funding settlement gives our partners the confidence they need to invest in new homes and the communities they work for.’

Cllr David Renard, the Local Government Association (LGA) housing spokesperson, welcomed the announcement but called for more ‘powers and tools’ to help councils deliver social housing. ‘With more than one million households on council housing waiting lists, it is vital that we build more housing for social rent, and we look forward to seeing more clarity around how this will be delivered,’ he said.

‘This is why we are calling for councils to be given the powers and tools to deliver a programme of 100,000 social homes a year, which would not only meet a third of the Government’s housing target, but reduce homelessness, get rough sleepers off the streets and support people’s wellbeing. This includes reforming Right to Buy and allowing councils to keep receipts in full and set discounts locally.

‘In addition, we would like to see the programme go further and allow councils to combine Right to Buy receipts with funding from the programme to deliver more housing.’

However, the CPRE said the funding looks disingenuous as represents no new investment in housing.

Tom Fyans, deputy chief executive of CPRE, commented: 'While this funding seems impressive, it was announced in the Budget and doesn’t represent any additional investment to tackle the affordability crisis. What’s more, the government risks looking disingenuous when it claims to be keen to tackle the issue of affordability given outrageous proposals in the recently published planning white paper.'

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