A £400m “Get Britain Building” Fund and a government-backed mortgage indemnity guarantee scheme to allow housebuyers to secure 95% mortgages are among measures announced today by the prime minister and deputy prime minister.
David Cameron and Nick Clegg described the move as “an ambitious new strategy” to tackle the housing shortage and strengthen the economy, which would break the negative cycle in which lenders won’t lend, builders can’t build and buyers can’t buy.
The mortgage indemnity guarantee scheme is designed to help an estimated 100,000 prospective buyers secure loans on 95% mortgages who are currently frozen out because of the need for large deposits. The government and housebuilders will provide security.
“Through the scheme, lenders will be encouraged to offer mortgages with smaller deposits, increasing demand for new homes and giving a welcome boost to the housing market,” said the government.
Major housebuilders have welcomed the proposal.
The government has also used the construction industry’s “Get Britain Building” campaign name for a new fund to get construction sites started, which have stalled for lack of funding.
The £400m Get Britain Building Fund will help to deliver up to 16,000 new homes, while an additional £30m of repayable short-term project finance will be made available to self-builders.
In addition, consultation will be launched shortly on a Right to Buy scheme, where social housing tenants can buy their homes. Monies received will fund new affordable homes and is expected to deliver up to 100,000 units.
Affordable housing providers are also in line to share almost £1.8bn of cash to develop new affordable homes, with the first £1bn of contracts just confirmed.
The government says this means it is on track to deliver 170,000 new affordable homes over the next four years.
More support is also being given to local areas wanting to deliver large-scale new developments. A new prospectus published soon will invite councils and communities to identify opportunities ranging from a few hundred homes up to a new market town with up to 10,000 homes.
Meanwhile, new action to tackle the 700,000 empty homes in the UK includes an invitation to housing associations and councils to apply for part of £100m government funding to bring empty homes back into use. Some £50m of further funding will tackle the worst concentrations of empty homes.
Other strategy reforms include transferring housing and planning powers to councils and local people, reducing regulation on housebuilders and accelerating the release of public land for new build projects.
For a full copy of the government’s new strategy see click on the link to the right of this story.
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