The Government has today announced a £39billion 10-year affordable and social homes programme as it attempts to ramp up housebuilding.
During the Chancellor’s Spending Review in parliament today, Rachel Reeves promised the investment would be delivered during the next 10 years.
She told MPs Labour’s planning reforms had increased opportunities to build homes and said it was the biggest spending increase in the sector in half a century.
Reeves confirmed that so far Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build affordable and social homes.
She said: ‘A plan to match the scale of the housing crisis must include social housing neglected for too many decades, but not by this Labour Government.
‘We are taking action. I am proud to announce the biggest cash injection into social and affordable housing in 50 years. A new Affordable Homes Programme – in which I am investing £39billion over the next decade.
‘Direct government funding that will support housebuilding especially for social rent and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build new houses.’
Housebuilding boost: Rachel Reeves announced that the government will invest £39billion over the next 10 years in social and affordable housing (stock image)
The Government will also launch a permanent, UK-wide Mortgage Guarantee Scheme in July to ensure the consistent availability of mortgages for buyers with small deposits.
It also says it will be investing in infrastructure and ‘land remediation’ to deliver new housing schemes in partnership with the private sector, albeit precise detail of what this will entail is lacking.
Housebuilders share prices jumped off the back of the news. FTSE 100 companies, Persimmon and Barratt Redrow have both seen their share prices rise by more than 2 per cent today
Meanwhile, FTSE 250 company Vistry Group saw its share price rise 9 per cent, Crest Nicholson is up 6 per cent and Bellway is up 3.5 per cent.
‘Today’s news is a really positive boost for the housebuilding industry and a step in the right direction,’ said Alex Slater, Rightmove’s housebuilding expert.
‘There aren’t enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market.
‘What will be key is making sure more affordable homes are delivered in the right places, where the gap in supply and demand is greatest.
‘Hopefully this is one of many steps to come to support the delivery of much needed homes across the country.’
Many across the construction industry have argued the government is set to fall woefully short of delivering on its promise to build 1.5million homes by 2029.
Richard Donnell, executive director of research at Zoopla believes the increased investment in affordable housing announced today could be vital in reaching that target.
‘The nation can’t spend its way out of the housing crisis and while more money is going in, the costs of development are rising faster than sales values which is reducing the viability of building homes.
‘Building the homes the nation needs requires the implementation of the full spectrum of planning reforms, more investment in affordable homes and further demand side support for new home buyers.’
