The government has confirmed that hundreds of millions of pounds worth of investment will be used to deliver thousands of new affordable homes.
Coming through the Affordable Homes Programme, £500 million will be committed to supporting the delivery of up to 5,000 affordable homes across the country. This will bring total investment in housing to more than £5 billion.
Social housing stock will be increased through a new 5-year social housing rent settlement, allowing the sector to gain more certainty for long-term funding, whilst existing stock will also be protected through the reduction of Right to Buy discounts, keeping more council homes within the housing stock.
Chancellor Rachel Reeves said:
“We need to fix the housing crisis in this country. It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.
“We are rebuilding Britain by ramping up housebuilding and delivering the 1.5 million new homes we so badly need.”
The investment will top-up the Affordable Homes Programme, ahead of the spring’s Housing Strategy.
At the Spending review, the government will also establish details of new investment that will succeed the 2021-26 programme, with this laying the foundations for the government’s commitment to deliver the ‘biggest increase in social and affordable housebuilding in a generation’ whilst also supporting councils to increase their capacity. This programme will see the delivery of a mixture of homes for sub-market rent and home ownership, including a focus on delivering more homes for social rent.
Angela Rayner, Deputy Prime Minister, also commented:
“We have inherited a housing system which is broken, with not enough homes being built and even fewer that families can afford.
“This is a further significant step in our plan to get Britain building again, backing the sector, so they can help us deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.”
A consultation will also be launched by the government on a new five-year social housing rent settlement, with this capping the rents that social housing providers can charge.
Greater protections for council housing stock come as social housing supply is reduced every year thanks to the Right to Buy scheme. By reducing discounts, and allowing councils to keep 100% of their Right to Buy receipts, councils will be able to deliver more replacement social homes whilst tenants can continue to buy their homes when the opportunity arises.
London Councils, representing the capital’s boroughs, welcoming the housing package as Executive Member for Housing and Regeneration Cllr Grace Williams saying:
"With London’s homelessness emergency posing the biggest threat to council finances in the capital, these announcements are hugely welcome news.
“Increasing investment in the Affordable Homes Programme and allowing councils to retain 100% of Right to Buy receipts will help boost the construction of much-needed social and affordable homes. Reducing the Right to Buy discounts will also better protect existing and newly-built council homes – a crucial resource in boroughs' efforts to support families at the sharp end of the housing crisis.
"The government is right to recognise the importance of putting social housing finances on a sustainable footing and the proposal for a new five-year rent settlement is a positive step. London boroughs face a black hole of £700m in their social housing budgets over the next four years as the costs of maintenance, repairs, and vital safety improvements outpace boroughs’ rental income.
“We will be making the case for a 10-year settlement in the forthcoming consultation, alongside a review of the existing debt settlement for Housing Revenue Accounts. These further support measures would ensure long-term stability and maximise boroughs’ ability to drive up housebuilding, which is so crucial to the government’s missions."
The response from London Councils comes following warnings of a £700 million black hole in boroughs’ Housing Revenue Accounts, as well as the recent publication of a report on the homelessness emergency in the capital.
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