Karen Lumley – 2014 Parliamentary Question to the Department for Communities and Local Government

The below Parliamentary question was asked by Karen Lumley on 2014-01-16.

To ask the Secretary of State for Communities and Local Government, what progress has been made on plans to increase house building by 2030.

Kris Hopkins

[Holding Reply: Thursday 23 January 2014]

The Government does not have a Whitehall building target. The last Administration had a state target to increase house building to 240,000 dwellings a year, yet house building then fell to its lowest peacetime rate since the 1920s.

By contrast, the Coalition Government has put in place a range of measures to get Britain building again, fix the broken housing market and help hard-working people get the home they want.

Action taken includes wide-ranging planning reform through National Planning Policy Framework; new incentives to deliver housing growth through the New Homes Bonus; as well as the Government’s broader long-term economic plan to tackle the deficit left by the last Administration and keep interest rates down. I would note:

· We have already delivered 420,000 new homes since 2010.

· New orders in residential construction have risen to their highest level since 2007 according to the Office for National Statistics;

· Housing starts are at their highest since 2007 according to DCLG figures;

· The number of first time buyers is at its highest since 2007 according to the Council for Mortgage Lenders;

· Repossessions are at their lowest since 2007, according to the Council for Mortgage Lenders; and

· New home registrations rose by 30 per cent in 2013 in England, the highest since 2007, and are up 60 per cent in London, according to the NHBC.

In relation to specific programmes:

Affordable housing

170,000 affordable homes have been delivered in England since April 2010.

Our Affordable Homes Programme will deliver 170,000 homes over the current spending review period (2011-2015) levering in £19.5 billion of public and private funding. We have announced a new ‘Affordable Rent to Buy’ scheme which will deliver affordable homes through a recoverable fund. We have also published details of a new Affordable Homes Programme for the next spending period, which will lever in up to £23 billion in public and private funding to deliver 165,000 homes from 2015 to 2018.

The Affordable Housing Guarantee Scheme is worth up to £3.5 billion (with further lending capacity held in reserve according to demand) and supported by up to £450 million grant funding in England. Up to 30,000 additional affordable homes will be underway by December 2017. Affordable Housing Finance Plc was awarded the licence for the Affordable Housing Guarantee Scheme in June 2013. The first eight housing associations to be approved to borrow through the scheme were announced in January 2014, who will raise over £400 million of debt to facilitate the delivery of over 4,000 new affordable homes. We also announced a European Investment Bank loan facility worth £500 million. More borrowers will follow.

The Right to Buy Scheme, allowing eligible social tenants to buy their homes at a discount has achieved almost 24,000 sales since April 2010, with the majority (16,200) since we reinvigorated the scheme in 2012. A total of 2,845 council properties were sold between October and December last year, a 42 per cent increase on the same period in 2012. The reinvigorated Right to Buy ensures, for the first time, that the receipts from the additional sales, that is those over what was forecast prior to the change, are reinvested in helping to fund new homes for affordable rent. So far, £300 million has been generated from additional sales and already over 2,000 homes have been started on site or acquired since April 2012.

Home ownership schemes (Help to Buy)

Since April 2013, the Help to Buy: Equity Loan scheme has offered buyers a 20 per cent equity loan that can be used towards the cost of buying a new build homes, allowing people to buy with a 5 per cent deposit. There were over 30,000 reservations and 19,394 completed loans across England by the end of March 2014, with funding for up to 74,000 sales by March 2016. Alongside this, the Help to Buy: NewBuy scheme has so far supported a further 5,173 households purchase new build homes by the end of March 2014. The Help to Buy: Equity Loan scheme was extended through the 2014 Budget announcement to 2020 to help 120,000 more households purchase a new build home.

The FirstBuy scheme was announced in the Budget 2011 to help support 10,000 first time buyers on the property ladder. The scheme was replaced in April 2013 with Help to Buy. There were 11,590 FirstBuy sales to the end of March 2014.

Since the end of last year, the Help to Buy: Mortgage Guarantee scheme is providing up to £12 billion of Government guarantees to support people to buy with a 5 per cent deposit, and over 2,500 homes have so far (by the end of January 2014) been brought through this route, and has helped lower interest rates for those with smaller deposits. The three Help to Buy schemes complement each other, and their success can be taken in the whole.

Private rented sector

The £1 billion Build to Rent programme, which provides development phase finance, is supporting new high quality development purpose built for private rent and is on track to create up to 10,000 new homes. The programme received £1.4 billion of bids under Round One, which is expected to support 15 developments which will provide over 2,600 homes across England in locations which include Durham, Liverpool, Manchester and London. Five contracts to the combined value of over £74.5 million have already been agreed which will deliver over 1,000 new homes for private rent; construction has already started in Southampton (Centenary Quay) and Manchester (Three Towers); more contracts will follow.

Bidding for Round Two of the Build to Rent Fund was significantly oversubscribed receiving 126 bids to the value of around £3 billion. 36 projects on the shortlist from Round Two are now going through a competitive due diligence process, with successful bids receiving funding to deliver thousands of new homes. A list of all shortlisted bids has been placed in the Library of the House. The shortlist is over-programmed, meaning not all shortlisted projects will receive funding. Shortlisting and due diligence are the first stages of the Build to Rent approval process. The Homes and Communities Agency will continue to work with bidders until exchange of contracts in order to ensure value for money for taxpayers.

In addition to direct funding, the Government’s Private Rented Sector Taskforce is continuing to build the private rented sector as an investment market and have identified £10 billion of domestic and foreign investment available in the private rented sector.

The Private Rented Sector Guarantees scheme will provide a government guarantee for up to £3.5 billion debt (with further lending capacity held in reserve according to demand) for borrowers investing in new build private rented sector homes across the UK. The guarantees will use the UK Government’s hard earned fiscal credibility to help lower the cost of borrowing and incentivise investment in the sector. DCLG is open for business to issue direct guarantees and is actively discussing potential applications with a number of borrowers looking to invest in large scale developments. On 18 March, we also launched a procurement inviting bids from the market to be our delivery partner for Private Rented Sector Housing Debt Guarantees, with the aim of maximizing take up of guarantees including for small and medium enterprises. My Department will be evaluating bids to perform the role in due course.

Infrastructure and development finance

The Get Britain Building investment fund has been provided over £500 million of finance to unlock smaller stalled sites. As at February 2014, it has helped kick start 11,893 new homes on stalled sites.

The Growing Places Fund is providing £770 million to deliver the infrastructure needed to unlock stalled schemes that will promoted economic growth, create jobs and build homes. The fund has been fully allocated to Local Enterprise Partnerships and the devolved administrations to fund local projects. Progress updates in June 2013 reported that £652 million of capital funding had been allocated to 305 projects across England. Local Enterprise Partnerships expect these projects to create 4,900 businesses, 94,000 jobs and 27,000 houses. A further update will be published in due course.

The £474 million Local Infrastructure Fund is helping to unlock large scale housing developments. To date, we have unlocked 15 sites capable of delivering almost 80,000 homes through a combination of financial and non-financial support. We are currently working to unlock a further 13 stalled schemes to deliver up to 40,000 new homes. In addition to the capital investment, we have made available £13 million of capacity funding to support local authorities in fulfilling their local housing ambitions.

The 2013 Autumn Statement also announced a further £1 billion to unlock development on large housing sites and a Prospectus inviting bids was published on 14 April. During the Easter Recess, we also published the Local Growth Fund (Housing Infrastructure) prospectus. This sets out the detail on how to access the £50 million part of the Local Growth Fund in 2015-16. It is designed to help speed up and restart housing developments between 250 and 1,499 units that have slowed down or stalled.

The 2014 Budget announced further funding for driving up housing supply including a £525 million Builders Finance Fund to provide development finance for small sites to support the construction of 15,000 new homes; the prospectus has also recently been published.

The Budget announced the intention to create an Urban Development Corporation for the Ebbsfleet area to accelerate the construction of a garden-city style development which will unlock up to 15,000 homes – with up to £200 million capital being made available. We have also published a prospectus to support further locally-led garden cities.

A new Estate Regeneration Fund of £150 million of recoverable investment will help kick start and accelerate the regeneration of some of our most deprived estates. And we will work with the Greater London Authority to support the regeneration of Brent Cross and unlock 11,000 homes at Barking Riverside.

We have also taken steps to scale back economically unrealistic Section 106 agreements, such as from the last Administration’s housing bubble, which result in no housing development, no regeneration and no community benefits.


The £30 million investment fund for Custom Build Homes is currently assessing loan funding of £22.6 million with the potential to deliver 270 units. At the 2014 Budget, we announced that the Government will consult on a new ‘Right to Build’ to give self builders a right to a plot from councils, a new £150 million investment fund to help provide up to 10,000 service plots, and announced will we look to extend Help to Buy equity to custom build. We have also exempted self-build from the Community Infrastructure Levy and we are consulting on a similar policy change for Section 106 tariffs.

Empty homes

This Government has provided £235 million of funding which aims to bring up to 12,000 homes back into use by March 2015. This is part of a wider package of measures to get empty homes and empty buildings back into productive use, in contrast to the last Administration’s policy of wholesale demolition. The numbers of empty properties in England have fallen to a 10-year low, and the number of long-term vacant properties has fallen by around a third since 2009.

Public sector land

The Public Sector Land Programme has identified land with capacity for over 100,000 homes which we aim to release to the private sector by March 2015. At the end of December 2013, we had released land capable of delivering 68,000 homes to be built.

Through the Strategic Land and Property Review we have identified scope to generate £5 billion of receipts from government land and property between 2015 and 2020. This will put land and property into the hands of those who can exploit them for commercial purposes – creating opportunities for housing and economic development.

This was part of a series of measures to support brownfield development, as outlined in more detail in the answer of 3 April 2014, Official Report, Column 780W.

There is more to do, but I hope this illustrates how this Government’s long-term economic plan is helping build more houses, help people move on and up the housing ladder and clean up the mess left by the last Administration.