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Jenrick unveils huge £12 billion boost for affordable homes

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Housing Secretary launches new investment in housing to help the country build back better, including homes for social rent to help the most vulnerable.

Housing Secretary Robert Jenrick has recently (8 September 2020) announced that the prospectus inviting bids for the government’s massive investment in affordable housing and new measures to make it easier to get a foot on the property ladder are being launched this week.

In total, the new programme represents the highest single funding commitment to affordable housing in a decade.

The £12.2 billion overall investment in affordable housing was confirmed at Budget, which also includes £700 million on new homes through the 2016 to 2022 programme.

A new £11.5 billion Affordable Homes Programme is to be delivered over 5 years from 2021 to 2026, providing up to 180,000 new homes across the country, should economic conditions allow.

The programme will unlock a further £38 billion in public and private investment in affordable housing. New homes will apparently be made available from next year.

The government further announced that around half of the new homes will be available for affordable home ownership, the theory being to help even more people to get a foot on the housing ladder.

The government has said that “In order to support people from all backgrounds, the rest will be made available for discounted rent, including 10% for supported housing – to support those with physical or mental health challenges.”

Nearly £7.5 billion will be delivered outside London by Homes England, the government’s housing accelerator. This is over £2 billion more than the amount given under the previous Affordable Homes Programme, which is said to underline “the government’s commitment to levelling up the whole country.”

The Greater London Authority has been offered £4 billion and negotiations about what they will deliver with this funding are said to be in progress.

Homes England will publish their Affordable Homes Programme prospectus shortly, inviting councils, housing associations and private providers to start preparing their bids.

Housing Secretary Rt Hon Robert Jenrick MP said:

“Today’s announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better.

This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership.”

As well as delivering homes for affordable ownership, the new programme will deliver homes for Affordable and Social Rent. Funding for Social Rent, which is typically 50 to 60% of market prices, will be available to housing providers across the country, providing secure, affordable housing to families who need it most.

The Housing Secretary also announced a new model for Shared Ownership to help more people onto the property ladder by vastly reducing the minimum initial share, and launching a consultation to ensure new homes deliver the accessibility that families need.

The new Shared Ownership model announced will:

  • reduce the minimum initial share you can buy in a property from 25% to 10%
  • allow people to buy additional shares in their home in 1% instalments, with heavily reduced fees
  • introduce a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance

A Right to Shared Ownership will be available on the vast majority of rented homes delivered through the new programme, providing tenants with a pathway into ownership by giving them the right to purchase a stake in their home.

Additionally, the Housing Secretary launched a consultation to consider how best to raise accessibility standards for all new homes in recognition of the importance of suitable homes for older and disabled people.

Nick Walkley, Chief Executive of Homes England, said:

“We welcome the launch of the new Affordable Homes fund, which gives Homes England a unique opportunity to work on behalf of the government to accelerate the delivery of high-quality, affordable homes.

The fund will support improved productivity in construction and unlock new economic opportunities across the country. Despite the challenges of COVID-19, this long-term funding settlement gives our partners the confidence they need to invest in new homes and the communities they work for.”

A new Infrastructure Levy has been proposed that would deliver more funding for affordable housing, including at least as many affordable homes as the current system.

More than 1.5 million new homes have been delivered since 2010, including more than 460,000 affordable homes. More than 644,000 households have been helped to purchase a home since spring 2010 through government schemes including Shared Ownership, Help to Buy Equity Loans, Help to Buy ISAs and Right to Buy.

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Tom Warrender

Posted:

Tom Warrender

Partner

Tom is a Solicitor and Partner with 14 years + experience advising clients in relation to commercial property matters. A Legal 500 recognised lawyer, Tom is a member of SHLA and CRELA, sits on our Board of Management & Heads our Social Housing Team.