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Government announces biggest funding commitment to affordable housing in a decade

17 September 2020 #Real Estate


The Housing Secretary Robert Jenrick has launched a programme which will see billions of pounds invested in affordable housing which will not only help the country ‘build back better’ but will also make it easier for the next generation to get a foot on the property ladder.

The new programme has allocated £12.2 billion for investment in affordable housing which includes £700 million for new homes through 2016 to 2022.  In addition, a new £11.5 billion Affordable Homes programme is to be delivered through 2021 to 2026 to provide up to 180,000 new homes across the country.

Half of the homes made available through this scheme will be for affordable home ownership, helping people get a foot on the property ladder.  The remainder of the homes will be at discounted rent including 10% for supported housing for those with physical or mental health challenges.

Nearly £7.5 billion will be delivered outside of London in line with the Government’s commitment to ‘level up’ funding across the whole country, while the Greater London Authority (GLA) has been offered £4 billion.  Negotiations are said to be ongoing with the GLA as to what will be delivered through this programme.  However, a number of large housing associations in London have expressed concerns that £4 billion is just not enough to address the housing crisis in London, with the mayor Sadiq Kahn claiming that £4.9 billion a year is required to deliver social and affordable homes in London. 

There are currently around 243,000 households on waiting lists for social housing in London, and the city accounts for around two-thirds of homelessness in England.  An investment of £4billion over 5 years therefore falls well below what is required even for just one year.

Alongside this funding commitment a new model for Shared Ownership has been announced that will:

  • Reduce the minimum initial share you can buy in a property from 25% to 10%;
  • Allow people to buy additional shares in their home in 1% instalments, with heavily reduced fees; and
  • Introduce a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance.

A ‘Right to Shared Ownership’ will also be available to those in rented homes delivered by the programme to allow for a path to home ownership.

Nick Walkley, (Chief Executive of Homes England) has described the programme as a way of ‘accelerating the delivery of high-quality, affordable homes’ and he goes on to say:

“The fund will support improved productivity in construction and unlock new economic opportunities across the country. Despite the challenges of COVID-19, this long-term funding settlement gives our partners the confidence they need to invest in new homes and the communities they work for.”

While it is of course welcome news that the Government’s investment programme in affordable housing is the best this country has seen for a decade, this investment may still not be enough to ensure that everyone can live in a decent, accessible and secure home and this will need to be kept under review by the Government particularly as the full impact of the coronavirus on housing need has not been fully realised yet.

 

Clarkslegal, specialist Real Estate lawyers in London, Reading and throughout the Thames Valley.
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Clare Rees

Clare Rees
Senior Solicitor

E: Clare.Rees@clarkslegal.com
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