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Billion £ housing project moves one step closer

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Bids are being sought for the Government’s multi-billion pound affordable housing project, with the first new houses being promised for next year.

An overall housing investment of £12.2bn includes a £11.5bn Affordable Homes Programme aimed at building up to 180,000 new homes across the country between 2021 and 2026 ‘should economic conditions allow’.

The Government said the programme will unlock a further £38bn in public and private investment in housing with around half of the new homes available for affordable home ownership. The remainder will be made available for discounted rent, including 10 per cent for supported housing.

A prospectus for the programme, published by Homes England, invites councils, housing associations and private providers to start preparing their bids. New homes will be delivered from next year.

‘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 Housing Secretary Robert Jenrick.

‘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 per cent of market prices, will be available to housing providers across the country, providing secure, affordable housing to families who need it most.

Jenrick also announced a new model for Shared Ownership with a reduced the minimum initial share – down from 25 per cent to 10 per cent. It will also allow people to buy additional shares in their home in 1 per cent instalments, with heavily reduced fees, and introduce a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance.

These changes apply to England only.

A ‘Right to Shared Ownership’ will be available on the vast majority of rented homes delivered through the Government’s new programme, ‘providing tenants with a pathway into ownership by giving them the right to purchase a stake in their home’.

For the homeless charity Shelter, chief executive Polly Neate said the planned investment was not enough. ‘With an unprecedented recession underway, major job losses on the horizon, and a housing emergency about to spin out of control, the Government must invest more in social housing than current plans allow for. Social homes are designed to be genuinely affordable, which is exactly what we need right now. Discounted homeownership schemes are not.  

‘We welcome the fact that today’s plan points to more social homes being built than we’ve seen in the past. But achieving the step change we need to deal with the scale of crisis that we face will require the Government to go further, faster. In five years it will be too late, the Government must ringfence enough money and spend it on social homes now’.

For the National Association of Estate Agents Propertymark, chief executive Mark Hayward said it was a positive sign that the Government was continuing to invest in housing. ‘It is particularly important that as we try to boost the economy, we build a greater supply of affordable houses that can rejuvenate those areas across the country most affected by the COVID-19 crisis.

‘However, demand for housing continues to rise, so the Government now needs to work to encourage people to move, continue to help people get on the property ladder and ensure that the property market drives forward the UK’s economic recovery’.