Government announces new plan for housing to help 'generation locked out of the property market'

26 October 2024, 00:38 | Updated: 26 October 2024, 00:44

The government has unveiled a major housing package aimed at tackling the shortage of affordable homes and boosting social housing availability.

The Budget will reportedly deliver more affordable housing, ensure social housing is available for those who need it and turbocharge the delivery of 1.5 million homes as the Chancellor commits to rebuilding Britain.

The housing package announced on Saturday will deliver up to 5,000 new affordable social homes with £500 million in new funding for the Affordable Homes Programme - bringing total investment in housing supply to over £5 billion - and supporting the delivery of 33,000 new homes through £128 million for housing projects across the country.   

Meanwhile, the stock of social housing will supposedly be increased through a new five-year social housing rent settlement that will give the sector more long-term certainty on funding and allow them to invest in tens of thousands of new homes.

The existing stock will also be protected by reducing Right to Buy discounts so that thousands more council homes remain in the sector.

Chancellor of the Exchequer, Rachel Reeves said: “We need to fix the housing crisis in this country.

"It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.

“We are rebuilding Britain by ramping up housebuilding and delivering the 1.5 million new homes we so badly need”.

'Broken'

Deputy Prime Minister Angela Rayner said: “We have inherited a housing system which is broken, with not enough homes being built and even fewer that families can afford.

“This is a further significant step in our plan to get Britain building again, backing the sector, so they can help us deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.

”The £500 million to deliver thousands of new social and affordable homes is a top-up to the existing Affordable Homes Programme and comes ahead of the Government’s Housing Strategy due in the Spring."

The Government will set out details of new investment to succeed the 2021-26 Affordable Homes Programme at the Spending Review.

This will lay the foundations for the manifesto commitment to deliver the biggest increase in social and affordable housebuilding in a generation, and to support councils and housing associations to build their capacity and make a greater contribution to affordable housing supply.

It will deliver a mix of homes for sub-market rent and home-ownership, with a particular focus on delivering homes for Social Rent.

The Government will also consult on a new 5-year social housing rent settlement, which caps the rents social housing providers can charge their tenants, to provide the sector with the certainty it needs to invest in new social housing.

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The intention would be for this to increase with Consumer Price Index inflation figures and an additional 1%.

The consultation will also seek views on other potential options to give greater certainty, such as providing a 10-year settlement.

These measures to increase affordable housing come alongside changes to the Right to Buy scheme, which will protect existing social housing stock to meet housing need and deliver a fairer and more sustainable scheme.

England’s existing social housing supply is depleted every year by the scheme while also disincentivising councils to build new social housing.

Discounts will be reduced alongside greater protections for newly-built social housing and councils will be able to keep 100% of the receipts generated by a Right to Buy sale.

This will enable councils to scale-up delivery of much needed social housing whilst still enabling longstanding tenants to buy their own homes.

The £128 million will support the delivery of new housing projects – including up to 28,000 new builds currently blocked by river pollution – cleaning up our rivers in the process - 3,000 energy efficient homes across the country and 2,000 new homes in North Liverpool.Meanwhile the £56 million investment at Liverpool Central Docks will also deliver office, retail, leisure and hotel facilities alongside the new homes.

As well as demonstrating our brownfield-first approach, it will transform Liverpool’s former docklands into a thriving waterfront neighbourhood. 

Kate Henderson, Chief Executive of the National Housing Federation, says:"We strongly welcome the £500m top-up to the affordable homes programme. This vital injection of funding, which we’ve been urgently calling for, will support housing associations to continue to deliver much needed affordable homes in the immediate term and prevent a collapse in delivery.

"We share the government’s ambition to build 1.5million homes over this parliament and stand ready to deliver the social homes needed, which is why we welcome a consultation on a new rent settlement.  This will provide both transparency for residents and long term certainty and financial stability for social housing providers. We also support the government's decision to review right to buy discounts.

"To achieve the affordable homes needed across the country, alongside this short term top-up, we look forward to a new long term housing strategy announced at the next spending review, including a significant boost in funding for social housing."