The Key Cities group has called for £3bn in funding to accelerate housebuilding
A new report by Key Cities found that the cost of delivering new housing is the main barrier to building homes, rather than planning system inefficiencies.
In its Turbocharging Housebuilding in Cities and Urban Areas report, Key Cities, which represents 25 cities and towns across the UK, found that 27% of local authority respondents cited finance as the main roadblock while 6% cited planning.
In response, the group proposed a £3bn Land and Infrastructure Viability Fund, which would pool together unspent Community Infrastructure Levy receipts, existing brownfield grants and new capital from the National Wealth Fund.
The report said this model would “make it easier to empower local authorities with streamlined, centralised access to capital, and the power to drive development forward” on brownfield and grey belt sites.
Pam Cox, MP for Colchester, and Naushabah Khan, MP for Gillingham and Rainham, are supporting the document.
According to the research, more than 60% of key cities reported over 1,000 homes in their area with planning permission but not yet built.
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Within the £3bn pot, the group requested the creation of a £500m Heritage Premium Grant programme to support the regeneration of long-derelict industrial sites with historic or cultural significance.
The report also proposed reducing affordable rents by replacing the current definition of affordable rent (80% of market rent) with a new benchmark – 130% of social rent. It is estimated that this would cut rental costs by just under 20%.
Khan said this would mean “rents are tied to local earnings, not inflated market rates, making homes genuinely within reach”.
Additionally, Key Cities recommended the implementation of a co-investment model into the National Planning Policy Framework, which Khan said would “unlock land, de-risk private capital and give councils real power to shape housing in their communities”.
It also aims to support SME housebuilders by suggesting an increase in the threshold of the “medium site” category from 49 to 99 homes in order to speed up approval processes.
The report comes after the government announced 12 new town locations at this week’s Labour Party conference.
Eamonn Boylan, former interim chief executive at Homes England, said: “We want to make sure that we maintain direct one-to-one dialogue with Key Cities – if we don’t, we will not achieve the government’s target, and we won’t deliver the priorities of Key Cities.”
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