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Member Briefing: Housing package announced ahead of budget

Date: 06/07/15

Housing package announced ahead of budget

In advance of the Budget on Wednesday, the Prime Minister and Chancellor, wrote in the Times at the weekend, announcing plans to ‘accelerate house building over the next five years’ through measures to support small house builders, build discounted homes for first-time buyers and introduce penalties for councils that fail to produce local plans. The package, supplemented by a further announcement today by the Housing Minister, Brandon Lewis, on finance for small house builders, will be detailed in a full ‘action plan’ to be published early this week.

Setting out a ‘One Nation’ vision which seeks to take on anti-development interests, the article states that ‘just 10 per cent of England is developed’, and that addressing the country’s housing needs requires planning reform in the form of reduced red tape, giving communities more control over where new homes are built and ‘action on councils that have failed to produce a plan for the homes their community needs’.

The article concludes:

‘It’s simple: you are either pro-reform, or not; for building homes, or not; on the side of young people, or not. We know our position. As a One Nation government, we will always be squarely on the side of those who want to get on.’

A full ‘action plan’ is due to be published early this week in advance of the Budget. It will include more detail on:

Discounted homes

The Conservative election manifesto included plans to build 200,000 Starter Homes by 2020 for first-time buyers under 40, available to purchase with a 20% discount. The Government has now confirmed that a proportion of starter homes will be required on all ‘reasonable sized housing sites’, and councils will have a duty to include starter homes in their plans.

The Government will use the forthcoming Housing Bill to press ahead with plans to give housing association tenants the Right to Buy their home with discounts of up to 70% available to some purchasers.

As previously announced, the Help to Buy Equity Loan scheme will also be extended beyond the original March 2016 cut-off to 2020.

Planning reform

The Government will take action on councils that fail to produce local plans, intervening to ensure that plans are in place to meet the community’s housing needs.

Housing Growth Partnership for SME house builders

Housing Minister, Brandon Lewis has today announced that a new Housing Growth Partnership will be created that will invest alongside smaller builders in new developers and establish a network of developers to act as mentors and advisers to small builders looking to grow their businesses.

The £100m equity fund, created through £50m from the Government and £50m from Lloyds Banking Group which was announced in autumn 2014, is expected to make around 50 investments in small builders’ projects, with the aim of providing an additional 2,000 new homes.

Housing Growth Partnership equity investments will range from £500k to £5m and be available to:

  • SMEs with a track record of delivering residential schemes
  • Builders completing an average of 10-100 units per year over the last three years
  • Builders on projects with a gross development value of between £750,000 and £12m.

Self-build and custom-build

The Government has a target to double the number of custom-built and self-built homes by 2020. It intends to achieve this by placing a duty on councils to help allocate land to people who want to build their own home. From April 2016, councils will have to hold a register of custom and self-builders and try to meet their requirements for land.

Brownfield funding

In addition to the commitment to ensure that ‘planning permission’ is in place on 90% of suitable brownfield sites by 2020 by driving forward with plans to increase the coverage of Local Development Orders, the Exchequer will invest £400m, match-funded by the Mayor of London, to create 30 Housing Zones.

Public sector land

The Government has re-confirmed its pledge to bring forward enough public sector land for 150,000 homes over the next five years.


David O’Leary

Policy Director