Families and first-time buyers will benefit from major investment of £8 billion for affordable housing and ambitious new reforms to drive up the supply of both low cost and social homes, Housing Minister Yvette Cooper has announced today.
A new Green Paper will include new investment, targets and proposals as part of a radical programme to meet the Prime Minister’s recent announcement of 3 million more homes by 2020. It will accelerate action to tackle wealth and housing inequality and support the aspirations of hard-working families, young people and communities.
New announcements today include the commitment to build at least 70,000 affordable houses a year by 2010-11. This includes 45,000 new social homes a year - more than doubling the amount built each year compared to 2004, and a goal of 50,000 social homes a year in the next spending review.
This is backed by £8 billion investment from the Comprehensive Spending Review for 2008 to 2010-11 - a £3 billion increase over the current spending period.
An additional £300m for transport infrastructure to support new homes was also announced. This comes on top of mainstream transport budgets and the £19 billion already being invested across Government in infrastructure in the South East and East - to ensure we build communities, not just homes.
The Government has already put tough new rules in place to protect new homes from flooding and will monitor these rules closely. Councils must consult the Environment Agency (EA) on their housing plans. If councils persist with their plans against the Environment Agency’s advice, the Government is prepared to take over the decisions. Effective flood defences will be a vital component of new infrastructure.
Built around three key principles - more and quicker homes, more affordable homes and greener, better designed homes - the Green Paper will include new proposals, which will be subject to consultation.
These will include:
Increasing Housing Supply
- New incentives and guidance for councils to ensure they build the homes their communities need. This includes a new Housing and Planning Delivery Grant available to those councils which grasp the scale of the challenge and ensure they have identified at least five years of appropriate land for development.
- Councils will need to do more to bring long-term empty homes back into use - we will consult on including this as part of the Housing and Planning Delivery Grant.
- New Local Housing Companies (LHCs), formed between councils and other partners. The first 14 LHCs are being announced today. They estimate around 35,000 homes could be built -at least half of them affordable housing - in areas right across the country from London to Leeds. Local councils will contribute th
- land, sharing in any rise in value over time; English Partnerships will provide financial and technical assistance; while the developer injects the investment and skills.
- New measures to discourage private sector builders from 'landbanking' Ministers will look at toughening up planning rules so that developers must put in place much of the infrastructure for a site within three years of gaining planning permission, and whether accounting rules should be toughened to ensure more consistent disclosure of land holdings.
- Areas in the North will for the first time bid to be designated as one of the 'New Growth Points'
- Mini-reviews of regional plans for housing will increase regional and local targets across the country.
More Affordable Homes
- An increased target of 45,000 new social homes a year by 2010-11, with a goal of 50,000 social homes a year in the next spending review- with increased delivery by housing associations and the private sector.
- Councils will be given more flexibility to build council homes where it is value for money - the rules restricting councils from building new social housing will be re-written, allowing councils to keep full rents from new council homes they build, and to get their full cash back from sales to tenants, unlike at present where part is pooled and recycled.
- Good councils will get increased access to housing grants to boost supply - ten councils and their partners have passed the first checks to qualify for the funding this year and barriers will be removed to allow more councils to bid for grant next year.
- Fourteen new Community Land Trusts will be set up to help boost the supply and financing of affordable housing. The trusts will be independent, non-profit making bodies taking a number of different forms to suit local circumstances. For example, local people or businesses with unused land will be able to establish a Trust and bid for grant to build affordable housing. The trusts could also be set-up as a local focal point for taking land out of the open market for affordable housing, through being given land and donations or buying land at below market value from the council.
- More affordable homes in rural areas, with a new target to be set later in the year as well as new guidance for rural local authorities to help first time buyers onto the housing ladder.
- Increasing shared equity support for first time buyers. A new 17.5 per cent equity loan will be made available to give house-hunters more flexibility in choosing the mortgage product that best suits their circumstances.
Greener, Better Designed Homes
- Local councils and developers are today invited to bid to host at least five new zero carbon eco-towns, with a new prospectus published today - each eco-town will provide 5,000 - 20,000 new homes, by 2016. A Government-led design competition will boost the architectural standards of eco-towns.
- The Government will pilot a new 'design test' with councils and developers to benchmark quality and help to remove poor schemes from the system.
- The Government today confirmed its target that from 2016 all new homes should be zero carbon, with milestones that by 2010 new homes should emit 25 per cent less carbon; and by 2013, 44 per cent less carbon
- The Green Paper will reinforce Government commitments retaining robust protections of the greenbelt and putting better planning at the heart of efforts to cut carbon emissions.
- Measures to increase water efficiency over current average use by around 20 per cent under proposals in a joint Defra/Communities and Local Government policy statement accompanying the Housing Green Paper.
Housing Minister Yvette Cooper said:
"We need to build more homes across England. The housing shortage means first-time buyers and young families are finding it increasingly hard to get their first step onto the housing ladder unless they have financial help from parents or relatives - and that's just not fair. Unless we act now by 2026 first time buyers will find average house prices are ten times their salary. That could lead to real social inequality and injustice.
"Every part of the country needs more affordable homes - in the North and the South, in urban and rural communities.
"We need more homes - but we need better designed, more sustainable homes. This is a green Green Paper, responding to the challenges of climate change, with zero carbon homes and new eco towns, and with tough planning rules on building in flood-risk areas."