Stimulating Housing Supply Initiatives By Government in UK
Introduction:
Deliver the reforms proposed in our Housing White Paper and at Autumn Budget to ensure the planning system supports our housing supply objectives. Improve productivity and competition in the housing market, opening it up to smaller builders and those who embrace innovative and efficient methods while supporting the work of DfE and BEIS to improve the provision of construction skills. Provide Home Building Fund short-term loan finance targeted at SMEs, custom-builders and innovators; and new guarantees to support house building, including SMEs and purpose-built rented housing.
Deliver the Housing Infrastructure Fund grant funding to provide the infrastructure which unlocks homes in areas where housing need is greatest and deliver Home Building Fund long-term loan funding for infrastructure and large sites.
A crisis in housing supply:
The long-term failure of successive Governments to build enough housing to meet growing need is widely accepted. The 2015 Government’s Housing White Paper, Fixing our broken housing market (February 2017), opens with the following statement: Since the 1970s, there have been on average 160,000new homes each year in England. The consensus is that we need from 225,000 to 275,000 or more homes per year to keep up with population growth and start to tackle years of under-supply.
This isn’t because there’s no space, or because the country is ‘full’. Only around 11 per cent of land in England has been built on. The problem is threefold: not enough local authorities planning for the homes they need; house building that is simply too slow; and a construction industry that is too reliant on a small number of big players.
New local authority & housing supply association provision:
The Affordable Homes Programme (AHP):
The Affordable Homes Programme is administered on behalf of the Government by Homes England (previously the Homes and Communities Agency). Providers (including housing associations) are required to bid for grant funding, successful bidders enter into delivery agreements with Homes England. Homes England published a new strategic business plan on 30 October 2018.
Reducing rents by 1%:
As part of the Summer Budget 2015 the Chancellor announced that rents in social housing would be reduced by 1% a year for four years resulting in a 12% reduction in average rents by 2020-21
Spending outside Housing Supply Revenue Accounts:
The UK Housing Review 2016 noted that local authorities were beginning to invest significant sums on affordable and market housing supply outside of their Housing Revenue Accounts (HRAs) by using stand-alone companies. Research by Inside Housing towards the end of 2016 found that 98 of 252 local authorities had set up a housing company to increase housing supply.
New Homes Bonus:
The New Homes Bonus is a Government scheme which is aimed at encouraging local authorities to grant planning permissions for the building of new houses in return for additional revenue. The Government initially matched the Council Tax raised on each newly built home for six years.
Infrastructure for housing:
The measures taken by the Coalition Government to overcome barriers to housing development related to infrastructure are summarized below: The government’s focus is on supporting local ambition for new long term communities and finding innovative ways to help communities overcome the barriers to delivering the homes they need. In November 2012, we announced government support to help progress development on large-scale sites by:
• supporting local capacity
• working across government to resolve barriers to delivery
• providing access to capital funding where appropriate.
Housing Growth Partnership:
This partnership between Lloyds Banking Group and Homes England (previously the HCA) was launched in 2015 to support small and medium sized housebuilders. The Spring Statement 2018 announced that £60 million in investment would boost the partnership and, together with match funding from Lloyds, would bring total additional investment to £120 million. Total funding is £220 million to deliver 3,400 homes.
Home Building Fund:
In October 2016, the 2015 Government announced the creation of a £3 billion Home Building Fund to provide:
• development finance – loan funding to meet the development costs of building homes for sale or rent
• infrastructure finance – loan funding for site preparation and the infrastructure needed to enable housing to progress and to prepare land for development.
Conclusion:
In Laying the foundations: a housing supply strategy for England (2011), the Coalition Government set out plans to enable more people to build or commission their own home. Various measures were introduced to ease the path for those wanting to build their own home including (repayable) funding; an exemption from the Community Infrastructure Levy; amendments to planning guidance; and improved access to public sector land.
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