New-build funding welcomed but housing industry says there is no overall strategy
Details of the boost to new-building funding in the Spring Statement by the Chancellor of the Exchequer have been announced, including new money for the West Midlands and London.
But the house building industry says that while the Government had identified many of the problems holding back new home building it does not yet have a proper overall strategy for doing so.
There will be funding of £100 million for a housing package in the West Midlands to support the Mayor’s ambitious target of delivering 215,000 homes by 2030 to 2031.
The funding, which will help acquire land and prepare it for housing as well as increasing density, recognises the Mayor’s commitment to increase delivery to nearly 16,000 homes a year and ensure that all local authorities in the area have local plans in place by the end of 2019 that reflect the commitment to deliver 215,000 homes.
The Housing Infrastructure Fund Forward Funding bid for Housing Growth Areas including the Commonwealth Games site at Perry Barr will be taken through to co-development, the next stage of the competitive HIF process.
There will also be a £1.67 billion funding package for London to build 26,000 more affordable homes. This deal will overall see at least 116,000 more affordable homes in London and bring the total funding for affordable housing in London to £4.8 billion.
It goes hand in hand with supporting councils and housing associations in London to build more homes at rents that are affordable for local people and will deliver homes for social rent, as well as homes for London Affordable Rent, flexible shared ownership and Rent to Buy. At least two thirds of the homes built with this additional funding will be for rent.
The details, supplied by the Ministry of Housing, Communities and Local Government, point out that the Government has already delivered nearly 82,000 affordable homes in the area, including 58,000 homes specifically for rent since 2010 and adds that work will continue with the Mayor of London who has overall responsibility for housing policy and delivery in London.
A £60 million investment has also been announced to boost the Housing Growth Partnership fund that supports small and medium sized house builders enabling them to invest in housing projects and develop their businesses.
Lloyds Banking Group have match funded to bring the total additional investment to £120 million. The Partnership, launched in 2015, now stands to be worth £220 million, delivering 3,400 homes.
The Ministry says that this will help fund smaller builders to be able to invest in projects and develop their businesses, allowing them to recruit and train skilled workers and become more competitive in their area.
However, the House Builders Association (HBA), the house building division of the National Federation of Builders (NFB), believes that while the Government has identified the key ingredients to tackling the housing crisis, it has not yet put together a strategy to deal with them.
Richard Beresford, chief executive of the NFB, said:
‘The Government has provided significant financial support towards tackling late payment, skills shortages and housing supply, but not a common thread aimed at solving the housing crisis. The Chancellor’s statement to bring annual house building to 300,000 units by the mid-2020s also denotes a lack of urgency.
‘If the Chancellor is serious about reaching 300,000 housing units per year, supporting apprenticeships and diversifying educational achievement then he will need SME house builders and constructors. SMEs not only train and retain two thirds of construction apprentices but they are our predominant private sector and rural employer.
‘The Government must deliver bolder planning reform, fairer procurement and a better understanding of the entire development process if it has any hope of making a success of today’s announcements.’According to Phil Carlin, managing director at regional property developer SevenCapital, pointed out that the industry urgently needs an update on the issue of land banking that continues to hold back the development of prominent sites in cities up and down the country.
Phil Carlin said:
‘Equally as crucial to this update is the need to see the authorities being more astute with granting access to public land, so that developers who already have access to funding and are well prepared are given priority over developers who do not, which is another issue that contributes to stifled development.
‘Over the coming months, the industry will very much be looking for more concrete action in this area, which is key to enabling both the industry and our cities to move forward.’
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