A million new homes by 2020?
The Government's aim to build one million new homes during the course of this parliament is seen by some as a fanciful pipe dream. Last summer's Brexit vote seemingly delivered a hammer blow to those plans with the Housing Minister at the time confirming one million new homes was never a target and warning it would be difficult to achieve those numbers by 2020. A call to action is undoubtedly underway and Charles Russell Speechlys have previously reported on government plans to boost housebuilding.
This latest update focuses on the funding central government are making available to both local authorities and private developers to encourage the development of large sites. If the Government are going to get anywhere near the one million mark by 2020 then there will have to be a significant move towards developing large plots of land which will add thousands of homes to the market.
£18 million "capacity fund"
An £18 million fund has been announced to accelerate housebuilding on large sites. Councils can now bid for a share of the capacity fund to tackle planning issues that cause delay to developments. The government is concerned about large sites stalling and wants to ensure the funding is available to enable local authorities to process large developments by getting hold of the additional resources and expertise they need to get sites through the planning process. The scheme will primarily be aimed at sites of 1,500 units or more.
6 new Housing Zones
The creation of 6 more Housing Zones has also been announced, all of which will be eligible for the capacity funding mentioned above. Housing Zones are brownfield sites where the local authority sets out their proposals for the development of the brownfield site and then works with private developers to realise those proposals.
The government announced its support and funding for a proposed new Garden Town at Otterpool Park in Shepway, Kent. The new town will be constructed on previously developed land along with publicly owned land and aims to deliver up to 12,000 new homes along with other local infrastructure. £750,000 of government funding will be provided to accelerate the development of the new Garden Town. Whilst a new Garden Town will have a significant effect locally, an extra 12,000 homes will barely scratch the surface of the 1 million homes target.
£3 billion housebuilder fund
The government has made a further £3 billion fund available to housebuilders. Any private sector housebuilder can apply from small builders as well as the large players in the market (subject to eligibility criteria). The fund provides:
- Development finance to meet the development costs; and
- Infrastructure finance for site preparation and delivering the infrastructure needed to develop out the site.
The funding can be provided on a short or long term basis and security will typically be registered against property assets of the developer. Initially the fund will be available for draw down till 31 March 2021. More money is always welcome but there are questions over whether this addresses land availability, in particular on the green belt. Financing to help with development will not help if the land is not available to develop in the first place.
When announced the one million homes by 2020 target was perceived by many to be fanciful but surely if we are to build our way out of the housing crisis then the government should be aiming high? Recent figures indicate that housebuilding is at an eight year high with 189,650 homes built over the past year but there is no time for complacency because if housebuilding continues at this level the government will fall well short of one million new homes by 2020. It will be interesting to see in the coming months the level of local authority interest in the capacity fund and to see how readily available the £3 billion housebuilder fund is to private developers.
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