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Autumn Statement: Hammond earmarks £7.2bn for housing as part of new fund

The government has announced a range of housing infrastructure measures in order to keep Britain building homes, outlined by the chancellor Phillip Hammond in his Autumn Statement.

Hammond has committed to spending £7.2bn on supporting the construction of new homes as part of a National Productivity Investment Fund (NPIF), which aims to add £23bn in high-value investment from 2017-18 to 2021-22 into productivity-critical areas.

Funded by the NPIF, it will also launch a new Housing Infrastructure Fund (HIF) of £2.3bn by 2020-21 which will be allocated to local government to encourage new private home construction in areas of greatest need. It is hoped that this will deliver up to 100,000 new homes.

The chancellor said of the government’s housing plans: “This package means that over the course of this Parliament, the government expects to more than double, in real terms, annual capital spending on housing.

“Coupled with our resolve to tackle the long-term challenges of land supply, this commitment to housing delivery represents a step-change in our ambition to increase the supply of homes for sale and for rent, to deliver a housing market that works for everyone.”

In addition to the HIF, the government’s headline housing proposals included its intention to relax restrictions on grant funding to provide affordable homes catering to a range of need, using an NPIF allocation of £1.4bn to deliver 40,000 more affordable homes by 2020-21. The Greater London Authority will receive £3.15bn for housing in its affordable housing settlement.

A large-scale regional pilot of the Right to Buy for housing association tenants will now be funded, with the government hoping that this will encourage 3,000 tenants to buy their own home.

In October, the communities secretary Savid Javid announced a new £3bn Home Builders’ Fund to accelerate construction on public sector land. Hammond confirmed in his Autumn Statement that the government will invest £1.7bn through the NPIF by 2020-21 to support this initiative.

David Orr, chief executive of the National Housing Federation (NHF), praised the announcement, saying that the measures would have a “significant impact” on the housing sector.

“The government is absolutely right to see housing infrastructure as critical to improving the nation’s productivity. Housing associations are ready to step up and deliver the homes people in this country need,” Orr said.

“We have been calling on the government to relax restrictions on existing affordable housing funding, so we are delighted with this announcement. Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, including for rent, more quickly across the country.”

Orr commented that the extra investment in affordable housing demonstrates the “strong relationship” between housing associations and the current government.

“We look forward to working with government and our members to develop a regional Voluntary Right to Buy pilot that works for housing associations and their tenants,” he concluded.

Previously the DWP announced that the implementation of Local Housing Allowance (LHA) rates in the social rented sector will be delayed to April 2019, with the government providing additional funding for local authorities so they can meet the costs of supported housing.

Orr said that although the NHF welcomed the government’s decision to change the tapers on Universal Credit, it would raise its concerns about changes to the LHA cap for UC recipients.

Earlier this week the government declared that it will no longer be implementing its controversial ‘Pay to Stay’ scheme, under which high-income local authority tenants would have been required to pay a market or near market rent.

The government will soon be publishing a Housing White Paper which sets out its “comprehensive” package of reform to increase housing supply.

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