Rent-to-buy scheme to help first-time buyers and new local housing companies among a raft of measures announced today
Housing minister Caroline Flint will today announce a series of measures to support the ailing housing market in an attempt to keep government housebuilding targets on track.
Detailed in “Facing the Housing Challenge - Action Today, Innovation for Tomorrow”, the measures include a scheme to help first-time buyers into homeownership and the creation of the first four PPP local housing companies.
Flint said: “The package being announced today will both help people facing difficulties right now, and lay the foundations to help meet the long-term housing needs of the country.
“We are determined to continue to do everything possible to promote long-term stability and fairness in the housing market… the long-term need to provide more homes has not gone away. We have a growing and ageing population and will only see worsening affordability unless we increase housing supply.”
The Rent to Homebuy scheme to help first-time buyers will allow eligible households earning below £60,000 a year to rent a new home at 80% of market rent or less for two to three years, then offer the option for part-ownership of the home.
The new local housing companies are aimed to increase new housebuilding through partnership working between councils and private firms. Councils will put their surplus land into the new bodies, with private-sector partners providing additional investment and skills.
Developments built by the partnerships will be jointly agreed but must include at least 50% affordable housing. The first four local housing companies will be in Barking and Dagenham, Newcastle, Nottingham and Manchester.
The government also announced that the £200m of funding already allocated to buy unsold stock from housebuilders to use as affordable housing could be topped up if enough suitable properties become available. The Housing Corporation is already in discussion with major housebuilders about the scheme.
In addition, proposals were revealed for up to 75,000 further new homes to be built in areas of high housing demand designated as “New Growth Points”, with £100m to be invested for supporting infrastructure such as schools and hospitals.
The first tranche of a £510m fund - the housing and planning delivery grant - to reward councils that are working to bring land forward for housing development was also announced.
Finally, the government said that it plans to work closely with local authorities and housing associations to examine proposals for mortgage rescue schemes.
David Orr, chief executive of the National Housing Federation, welcomed the measures. “It is good that the government is thinking creatively about addressing our affordable homes shortage, supporting current homeowners and assisting housebuilders in the current challenging environment,” he said.
“Try-before-you-buy schemes make a lot of sense - and as the homes involved in this new pilot will be provided by housing associations, they will be of higher quality and better for the environment than homes built for sale on the open market.
“We are glad that the government is considering our proposals for a nationwide mortgage rescue scheme run by housing associations, and for them to be given greater resources to buy homes from private housebuilders. We urge ministers to bring forward these measures as soon as possible.”
Bob Kerslake, chief executive designate of the Homes and Communities Agency, was also welcoming of the Rent to Homebuy scheme. He said: “It has been tried before in different guises but in the current market conditions there will be more interest We have to be open to trying new ideas in the current conditions and trying some old ideas that did not work at the time.”