In what is a major boost for the housing sector in the UK, Chancellor Phillip Hammond has revealed the government ’s plans to splash around £4 billion in an attempt to build 40,000 new and affordable homes by 2021.
The plans have been put in place as a way of dealing with the current housing crisis, and they include a £2.3 billion fund for housing infrastructure within local authorities to provide 100,000 new homes, as well as an extra £1.4 billion being made available to local authorities and housing associations in order to provide affordable homes both to rent and buy.
The funds which have been described as ‘new cash’ will be split into two sections, one focusing on infrastructure projects that will make sites viable for building and the other focusing on providing the funds to make homes much more affordable for people in the UK.
The move away from shared ownership schemes does however mean that despite the extra money that will be available to build affordable housing, there is now expected to be 13,000 fewer homes built over the course of the next five years according to the Office for Budget Responsibility (OBR).
“The government’s previous obsession with home ownership meant that funding wasn’t getting to the people most in need of affordable housing” commented the director of Generation Rent, Betsy Dillner. “By giving builders more flexibility over what tenure of homes they build, the government has made it easier to provide homes for people on the lowest incomes.”
The shared ownership schemes would have been likely to bring more money to the housing associations, but could the government’s decision to drop these plans be more beneficial in the long term? Only time will tell, as we will have to wait a number of years until we know the real effects of these plans.