Much has changed in the last three weeks. However the UK's housing shortage has not gone away and it is easy to forget that in the budget last month some radical changes to the housing market were proposed by the Chancellor.
In the Budget, Chancellor Rishi Sunak announced a further £9.5 billion of funding for the Government’s Affordable Homes Programme.
The £9.5 billion investment brings the total allocation of grant funding to £12.2 billion from 2021-22 and will be used to support the creation of affordable homes across England. The Government expects the funding to bring in an additional £38 billion in public and private investment.
The Programme announced by the Chancellor is an increase on the existing Affordable Homes Programme, worth £9 billion, which was launched in 2016 and is due to end in 2021.
At present the Affordable Homes Programme includes the Help to Buy: Shared Ownership scheme, the Rent to Buy scheme and specialist homes for older, disabled and vulnerable people. The Government’s intention was for the majority of the 2016-21 funding to go towards the Help to Buy: Shared Ownership scheme. In practice, 52% of homes funded by the Programme have been affordable rent homes and 44% have been affordable homeownership homes.
It is thought that the 2021 Programme will have a similar emphasis on home ownership, with the Conservative Manifesto stating that “we must rebalance the housing market towards more home ownership” and including a commitment to simplify shared ownership products.
House-builders and developers were able to bid for funding under the current Programme but await details of the new scheme, including the criteria that must be met in order to be eligible to receive funding.
The announcement of investment in the Government’s Affordable Homes Programme has been welcomed in the housing sector as a helpful contribution to facilitate the delivery of new homes. However with the recent Covid-19 crisis it may take a little longer for these changes to have a positive impact of the housing market.
“This will be the largest cash investment in affordable housing in a decade