New money included in £7.1bn National Home Building Fund
The government has unveiled an extra £2.3bn in funding for housing in its autumn spending review earlier today on top of the £12.2bn Affordable Homes Programme already announced earlier this year.
The new money comes as part of a four-year £7.1bn National Home Building Fund (NHBF) which includes £4.8bn of previously announced capital grant funding for land remediation, infrastructure investment and land assembly.
A further £2.2bn of new loan finance will be provided to support housebuilders through Help to Build, and £100m for non-Mayoral Combined Authorities in 2021-22 to support housing delivery and regeneration.
More funding for the NHBF will be confirmed at the next multi-year spending review according to Treasury documents, which promise to “deliver on the government’s commitment to provide £10bn to unlock homes through provision of infrastructure”
Taken together, documents for today’s one-year spending review claim the government will provide nearly £20bn in capital housing investment, with the NHBF expected to unlock up to 860,000 homes.
Spending rules for local authorities will also be relaxed, allowing them to increase spending by up to 4.5%, while a new £4.4bn ‘levelling up’ fund was announced which local areas will be able to use to bankroll local projects such as new roads and improvements to high streets and town centres.
Reacting to the Home Building Fund, public sector director at Wates Steve Beechey said the company was “naturally pleased” by the announcement, but added that it needed to be combined with a “fundamental overhaul of our planning system, which is getting in the way of the effort to tackle the UK’s housing crisis”.
Federation of Master Builders chief executive Brian Berry said the extra funding was welcome, but warned that: “without urgent investment in our local authority planning departments to speed up decisions, projects are struggling to get off the ground.”
Meanwhile, chief executive for the Association for Consultancy and Engineering Hannah Vickers said the NHBF, which had not been trailed unlike many of the spending review’s non-housing related announcements, came as a “surprise” and would be “warmly welcomed”.
But the announcements received criticism from some quarters for lacking any mention of low carbon homes, which Berry said was “unacceptable given the challenges we face.”
He added: “We cannot meet our net zero carbon targets without improving the energy efficiency of our homes and moving to low carbon heat sources.
“Failure in this spending review to commit to a long-term retrofit strategy or to bring forward the £9.2bn promised in the Conservative manifesto will set the country back.”
Today’s announcements come against the backdrop of grim economic forecasts from the Office for Budget Responsibility, which said that the UK economy would shrink by 11.3% this year because of the impact of the covid-19 pandemic, the largest contraction in more than three centuries.