The chancellor has announced an additional £2billion in funding to deliver more affordable housing.
Rachel Reeves said that the latest boost in grant funding will deliver 18,000 affordable homes which will be complete by the end of the government’s current parliament, helping it achieve its target of 1.5million homes.
The extra £2billion is intended to act as a “bridge” between the current fund of £11.5billion between 2021 and 2026 and the new grant funding scheme which is expected to be announced in the spending review in June.
The additional funding will be available on the same terms as the current Affordable Homes Programme, with providers given until March 2027 to begin construction on the homes.
Over recent months, the government has already topped up the Affordable Homes Programme with instalments of £500million and £300million.
The chancellor said: “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation.”
“Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets.”
In response to the announcement, Ian Fletcher, director of policy (real estate) at the British Property Federation, said: “While an additional £2billion in funding to deliver 18,000 extra affordable homes is very welcome, the scale of the challenge remains immense and delivery in many cases will remain closely tied to that of the wider housing market. That’s why it is vital that the government adopts a multi-tenure approach to delivery and focuses on areas like Build to Rent, supporting forms of intermediate housing such as discount market rent, which are not dependent upon sales absorption rates.”
“Predictable long-term decisions on funding and social housing rents can also help simulate more investment, including private sector investment, in affordable housing. Our big ask at this time is that the further funding due to be announced later this year is linked to a long-term funding programme that allows the sector to plan for growth in the long term.”
Paul Rickard, chief executive of Pocket Living, said: “Tackling the viability issues and getting housing schemes from the point of planning consent to a start on site remains one of the greatest challenges that the house building industry faces. This is most acute for SME housebuilders who need a rapid turnaround of their developments to simply survive and stay in business. While this is welcome news, we await further details on the allocation between London and the rest of England, especially given the crisis in housing starts in the capital and the shortage of affordable homes. We look forward to the longer-term funding announcements and will continue to work with the government on targeted initiatives to support the SME housebuilding sector more widely before it is too late.”
