In a major development, the UK government has unveiled a transformative plan to address the housing crisis.
- A £5 billion investment aims to deliver 1.5 million homes within the current parliamentary term.
- The Affordable Homes Programme will receive an additional £500 million to construct up to 5,000 new affordable homes.
- Significant support measures, including reduced Right to Buy discounts, are being introduced to stabilise social housing.
- Government consultations on future housing initiatives, including a ‘brownfield passport’ and the Mortgage Guarantee Scheme, are underway.
Chancellor Rachel Reeves has announced a comprehensive £5 billion investment targeting the delivery of 1.5 million homes by the end of this Parliament. This initiative highlights the government’s commitment to tackling the housing crisis head-on. The plan encompasses a wide-ranging approach, including a substantial £500 million boost to the Affordable Homes Programme, which is set to facilitate the construction of up to 5,000 additional affordable homes.
In a strategic move, £3.2 billion is earmarked for affordable housing initiatives, reinforcing the government’s commitment to improving housing accessibility. Furthermore, a significant £3 billion will be channelled into supporting small house builders via housing guarantee schemes, fostering growth in the private housing market. This blend of investments signals a forward-thinking strategy to boost housing supply and support various housing sectors.
Part of the government’s approach includes a reduction in Right to Buy discounts, allowing local authorities to keep full receipts. This policy change is designed to enable reinvestment into housing stock and the development of new housing. Stability for social housing providers is being prioritized with a new social housing rate settlement pegged at the Consumer Price Index (CPI) plus 1% for the next five years, providing much-needed financial consistency.
The government has initiated measures such as the National Planning Policy Framework consultation, the New Homes Accelerator, and the New Towns Taskforce. These initiatives aim to streamline housing development processes. Additionally, there are proposals for a ‘brownfield passport’, which would simplify and speed up approval processes for appropriate projects. Future grant investments beyond the current Affordable Homes Programme are also under review, focusing on increasing affordable housing stock, particularly for social rent.
To realise these ambitious housing targets, the government has pledged to increase the number of planning officers, addressing a key bottleneck in decision-making processes. Jonathan Pearson, director of Residentially, remarked on the importance of these measures. He pointed out that the five-year rent settlement and adjustments to the Right to Buy scheme are pivotal for providing stability to housing providers.
Looking ahead, the government plans to solidify the Mortgage Guarantee Scheme, aiming to make it a permanent fixture supporting 95% lending. This move is expected to provide ongoing confidence and consistency in the mortgage market. Additionally, substantial site developments are underway, with projects such as the Liverpool Central Docks receiving £56 million for 2,000 new homes and a £25 million joint venture targeting 3,000 energy-efficient homes across the country.
This investment marks a significant step forward in the government’s efforts to both meet housing demand and provide stable, affordable options for citizens.
