On Tuesday, Housing Secretary Robert Jenrick unveiled the new £11.5bn Affordable Homes Programme, which will be implemented over five years from 2021 to 2026.
The money is in addition to the £700m currently being spent on new homes under the scheme running from 2016 to 2022. The Affordable Homes Programme (AHP) aims to provide up to 180,000 new homes, “should economic conditions allow”. Around £7.5bn will be distributed outside London by Homes England, the Government’s housing facilitator.
The sum is around £2bn more than the amount given under the previous AHP, bolstering the administration’s commitment to levelling up the entire country.
While the Greater London Authority has been offered £4bn, discussions as to what it will produce with the funding are ongoing.
Councils, housing associations and private providers will be invited to start preparing their bids once Homes England has published its AHP prospectus this week. New homes will become available from next year.
Mr Jenrick commented that the announcement of the AHP constitutes the largest single funding commitment to affordable housing in a decade and forms part of the Government’s comprehensive plans to “build back better”.
Half of the new homes created will be available for affordable home ownership, while the rest will be designated for Affordable and Social Rent. Funding for Social Rent, typically 50 to 60% of market prices, will be available to housing providers across the nation, to offer affordable, secure homes to those families most in need.
New homes will be offered at discounted rents to people from all backgrounds, including 10% for supported housing, intended for those with physical or mental health needs.
New model of shared ownership
Mr Jenrick went on to give details of a new model of shared ownership, aimed at helping more people move onto the property ladder by reducing the minimum initial share. He also promised to launch a consultation process to ensure families, especially those including older and disabled people, are able to access the new homes easily.
According to the new shared ownership model, the minimum initial share would-be home owners can buy in a property will be reduced from 25% to 10%.
Purchasers will also be able to buy increased shares in their home in instalments of 1%, at lower fees, and there will be a 10-year period for new shared owners during which the landlord will pay for any repairs and maintenance.
A Right to Shared Ownership will be available on the majority of rented homes created through the new programme, providing tenants with a means of acquiring ownership by being given the right to buy a stake in their home.
Nick Walkley, CEO of Homes England, said the fund will encourage improved productivity in the construction sector and provide new economic opportunities across the country. The long-term funding settlement will give their partners the confidence they need to invest in new homes and the communities they work for, despite the challenges of Covid-19.
Government support for affordable homes
Mr Jenrick’s announcement follows on the back of proposals presented last month to modernise the country’s “outdated” planning system, including a new and simpler method of raising contributions from developers to ensure that companies pay their fair share of funding for affordable homes.
A new Infrastructure Levy has been suggested that would deliver more funding for affordable homes, resulting in at least as many affordable homes as the current system provides.
Since 2010, more than 1.5m new homes have been created, including in excess of 460,000 affordable homes. Furthermore, government schemes such as Shared Ownership, Help to Buy Equity Loans, Help to Buy ISAs and Right to Buy have helped more than 644,000 households to buy a home.
The Government’s priority is to build the homes people need to so that everyone can live in a well-built and accessible property.
Recent government support for the house building sector includes adding an extra £450m to the Home Building Fund to support smaller developers, providing £400m to build new homes on brownfield sites and putting forward a review of the planning system to make the process more efficient, cut red tape and exploit technology to deliver homes more quickly.