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Osborne Urges Builders to Deliver 400,000 New Homes

Chancellor George Osborne recently made an attempt to encourage hesitant housebuilders to produce more new homes by presenting them with a package of measures worth £6.9bn.

The combined Autumn Statement and Spending Review contains an affordable housing package, with cash to enliven both the supply and demand sides of the housing sector in the UK.

Mr Osborne also confirmed that spending for transport capital would be increased to supply High Speed 2 and the roads programme with needed capital, as the department’s budget was recently reduced by 37%. Its capital spending, however, will increase increase by 50% £61bn.

The Chancellor added that this will fund the biggest road investment programme in decades.

The funding includes the commencement of construction activity on HS2 and maintaining existing plans to spend £13.4bn on the Roads Investment Strategy and more than 5bn on roads maintenance.

Toward the end of five years, there will be up to £475m released to fund bigger local transport projects, which will enable local areas to place bids for funding on schemes that would be too costly for them to cover on their own.

The Government has increased spending on the school estate and has made a commitment to provide £23bn to open 500 free schools, create over 600,000 extra school places, refurbish and rebuild over 500 schools, and deal with important maintenance needs. All of this will be provided over the current Parliament.

With regards to housing, Mr Osborne added that he was doubling the housing budget to £2bn annually and intended to deliver 400,000 new residences by the close of the decade. He pointed out that this was the largest house building scheme since the 1970s.

Complete details have yet to be made available to the public, but the spending package includes generous developer subsidies of close to £2.3bn to encourage them to build 200,000 more badly-needed starter homes, which a first-time buyer may purchase at a discount of 20% from their market value.

Originally announced in October 2014, the discount policy on starter homes will apply to house prices up £450,000 in London and £250,000 outside the city.

Structural Defects Insurance

Demand-wise, up to £4bn will be provided to construct 135,000 Help to Buy: Shared Ownership homes for those whose household income comes to less than £80,000. (In London, this particular threshold will be £90,000 instead.) Mr Osborne also initiated the London Help to Buy scheme, which will supply interest-free loans on up to 40% of the amount needed to purchase a home.

An additional £400m has been set aside to help build 8,000 special homes intended for older people or those coping with disabilities.

Close to £200m is being made available for 10,000 new homes that tenants can occupy for five years at a lowered rent while they save money for a deposit. These tenants will then have the first ‘right’ to buy the property at the end.


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