Govt releases £7bn in expansion of affordable housing scheme
The money will be put up for tender to housing providers alongside the £1.4bn announced at the Autumn Statement, and in total will deliver more than 240,000 houses.
The new funding will also be used to expand the range of tenures available under the scheme, now including affordable rent, shared ownership and Rent to Buy.
The government said it wants the programme to help meet the housing needs of a wider range of people in different circumstances and at different stages of their lives.
Javid said: “Our newly-expanded affordable housing programme, turbo-charged by a multi-billion pound investment, will allow housing associations to build more homes in places where they are most needed, particularly for families who are just about managing.
“By encouraging the delivery of more homes under a variety of tenures, we can create a housing market which truly works for everyone, meeting the diverse housing needs of this country.”
The affordable home schemes runs from 2016 to 2021 and are primarily focused on households with lower than average incomes and who tend to struggle to save.
The government’s new Rent to Buy homes will be let with rents set at up to 80% of the local market rent for a set time period, to give tenants the opportunity to save for a deposit and the option to buy their home.
Housing minister Gavin Barwell said: “Up and down the country we are investing more in affordable housing to help make the dream of home ownership a reality for thousands more tenants.
“This includes opening up the housing market to younger people and providing decent, affordable homes for rent for those who cannot afford to buy.”
The government intends to publish a housing white paper giving further details later in January.
First industry reaction has been positive. Council of Mortgage Lenders (CML) director general Paul Smee welcomed the new funding options but warned of introducing too much complexity.
He said: “Today’s announcement can deliver the tenure flexibility that providers of social housing have been calling for, and which will help address the housing affordability challenges faced by many people today.
“In pushing forward with its plans, the government needs to strike the right balance between widening tenure options and introducing schemes that are workable for lenders and avoid unnecessary complexity.”