Since 2010, every financial statement the Government has made has included plans for housing, in clear recognition of the central and crucial role it plays in our economy. The figures speak for themselves – housing construction averaged three per cent of GDP in the last decade and every new home built supports at least two jobs.
So like this year’s Budget and last year’s Autumn Statement, this week’s Spending Review included plans for a cash injection for housebuilding – a £3.5billion investment package that will build thousands of homes and support thousands of new jobs.
More certainty for affordable homes
Affordable homes are at the heart of this new investment, with a £3.3 billion pot to build 165,000 new homes by 2018. This is equivalent to 55,000 new homes a year – the fastest annual rate of building for two decades.
Within this, a £400million fund will deliver a completely new product: Affordable Rent to Buy.
This scheme will help aspiring homeowners save for a deposit by letting out new build homes at affordable rents for a fixed period of time. After this time it will be sold, and the sitting tenant will have the first option to buy.
The scheme will give hard working families the stability they need to save up for their first step on to the housing ladder.
And we’re giving similar stability to social landlords. For the first time, Government is providing a long-term commitment to rent levels, which will increase by CPI + 1% a year for ten years from 2015.
Backed with the multi-billion pound funding plan up to 2018, this will give housing providers the chance to plan well into the future and invest in long-term housing programmes.
I know when I spoke to the Chartered Institute of Housing annual conference on Thursday this was something delegates were particularly interested to hear. You can read more of my speech here.
Getting Britain building
So our ambitious plans for affordable house-building were at the heart of the Government’s Spending Review but there were other housing measures, including:
A further £102million to help get work restarted on locally-supported large-scale sites;
- New rules to help free up surplus, formerly-used public sector land;
- A £160million boost to the Decent Homes programme, so councils can improve almost 11,000 of their housing stock for their tenants; and
- A new Single Growth Fund of £2billion a year that Local Enterprise Partnerships can bid for to drive forward job creation and investment in their areas.
This is the bold action needed to keep house building on the right track.