Autumn statement unveils plans to use infrastructure capital fund to accelerate existing housing schemes
Planned housing developments that ground to a halt during the recession will be kickstarted with a £225m capital injection aimed at bringing 50,000 new homes on to the market, the chancellor George Osborne has confirmed.
The chancellor’s autumn statement said that a chunk of the new £5.5bn infrastructure capital fund would be set aside to accelerate a handful of existing housing schemes that had received planning permission but had been unable to attract financing.
The plan to bring forward extra 50,000 homes, which was flagged up by the deputy prime minister Nick Clegg a fortnight ago, comes on top of plans to build thousands of extra homes announced by the chancellor earlier this year.
The chancellor said in his speech the government planned to build 120,000 new homes overall.
Under the scheme it is thought loans will be offered to developers to start building work on local schemes of between 4,000 and 9,500 homes. The loans would be repayable when the homes were sold. If all the schemes went ahead nearly 50,000 houses and flats would be built.
But housing experts said that despite a government commitment to “get Britain building”, in the face of historically low levels of house building, there was little in the Autumn statement to suggest that the government had recognized the scale of the housing crisis
The Chartered Institute of Housing called the chancellor’s announcement a “missed opportunity.”
Chief executive Grainia Long said: ” I’m afraid the government has failed to fully capitalise on the momentum generated by earlier pledges to boost housing.
“While the Chancellor’s promise to invest £225m to boost the construction of 50,000 new homes is welcome, it is only a small contribution compared to the scale of the problem.
Today’s autumn statement makes it clear government still hasn’t recognised the scale of the crisis.”
An additional £290m of infrastructure capital would be set aside to free up surplus public sector owned land for housing development, the chancellor said. This was welcomed by the hosting lobby, although there were concerns that the initiative did not go far enough.
David Orr, chief executive of the National Housing Federation, said: “The extra money made available to the Department of Communities and Local Government to buy surplus public sector land is welcome, but it is at a much smaller scale than we expected.
“It is imperative that the Government moves forward quickly with this and ensures the rapid release of land for new homes.”
The prime minister David Cameron promised in September to “unleash one of the biggest homebuilding programmes this country has seen in a generation.”
He announced a debt guarantee scheme of £10bn to help private developers and housing associations attract funding to deliver new “affordable” homes for private rent, alongside new capital funding of £300m to provide 15,000 new affordable homes and bring 5,000 empty homes back into use.
Housing experts say the UK needs to build around 233,000 new homes a year to meet the demand fuelled by the predicted expansion in in the number of households over the next two decades – up almost 5m to 27.5m.
In 2011, 114,000 homes were built in England, according to official figures. This was up 7% on the previous year, but remained the second lowest annual house building total for over six decades. The number of new starts is down 30% since the coalition came to power in May 2010.