£7 billion fund announced for more affordable new homes to be built in UK

Funds of £7 billion is being released by the UK Government to help build more new affordable homes in the country, it has been announced.

Housing providers can now apply for a share of the fund, which was allocated an additional £1.4 billion at the Autumn Statement to deliver 40,000 new affordable housing starts across the country.

Communities Secretary Sajid Javid said that the Government is also expanding the existing affordable homes programme to offer a wider range of ways of helping people into home ownership and to provide support for those that need affordable housing.

He explained that by expanding the variety of tenures available, which now includes affordable rent, shared ownership and Rent to Buy, the programme will help meet the housing needs of a wider range of people in different circumstances and at different stages of their lives.

This includes homes for Rent to Buy which will be let with rents set at or below 80% of the local market rent for a set time period, giving tenants the opportunity to save for a deposit and then the option to buy their current home.

‘Our newly expanded affordable housing programme, turbo charged by a multi-billion pound investment, will allow housing associations to build more homes in places where they are most needed, particularly for families who are just about managing,’ Javid pointed out.

‘By encouraging the delivery of more homes under a variety of tenures, we can create a housing market which truly works for everyone, meeting the diverse housing needs of this country,’ he added.

The move should help the ambition of owning a home more of a reality for thousands of people who currently rent their home, according to Housing Minister Gavin Barwell. ‘This includes opening up the housing market to younger people and providing decent, affordable homes for rent for those who cannot afford to buy,’ he said.

The Homes and Communities Agency (HCA) is leading the Government’s drive to increase the scale and pace of delivery of house building. Chairman Sir Ed Lister said that the expanded affordable housing programme will help the HCA to continue to work with both housing associations and developers new to this area of the housing market to increase the availability of affordable homes.

‘The expanded programme will also allow providers the flexibility and agility to respond to local needs and markets. This will boost house building by encouraging providers to deliver a mix of homes for both affordable rent and low-cost ownership that is most suited to each place,’ he added.

More will also be announced in the housing white paper which is due to be published later this month.

Shared Ownership homes provide a route into home ownership for those struggling with affordability while Rent to Buy homes are aimed at helping first time buyers to save for a deposit to buy their home whilst they rent at discounted rates.

Government schemes are primarily focused on households with lower than average incomes and who tend to struggle to save. They will also benefit those families who are just about managing.

Paul Smee, director general of the Council of Mortgage Lenders (CML) beleives the funding will help address the housing affordability challenges faced by many people today. ‘Our recent research reinforces the argument that shared ownership, for example, is the only means of buying for some would-be home owners,’ he said.

‘As ever, the CML stands ready to help develop schemes that lenders can support. In pushing forward with its plans, the government needs to strike the right balance between widening tenure options and introducing schemes that are workable for lenders and avoid unnecessary complexity,’ he pointed out.

‘We look forward to seeing more details in the forthcoming housing white paper and to working with the government in addressing the UK’s housing challenges,’ he added.