Details of Theresa May’s announcements during her conference speech yesterday about how she will fix the nation’s ‘broken’ housing market have been revealed including measures worth an extra £2 billion.
The extra cash will be spent on building additional council homes for rent, which comes on top of the extra £10 billion announced on Monday to fund an expansion of the Help to Buy scheme.
The budget for affordable homes is to be increased by £2 billion to £9.1 billion and will see an extra 25,000 homes to rent created that are “affordable for local people”.
Theresa said she was “getting government back into the business of building houses” and that she wanted to create “a new generation of council houses to help fix our broken housing market”.
“Whether you’re trying to buy your own home, renting privately and looking for more security, or have been waiting for years on a council list, help is on the way,” she said.
The £2 billion will also be used to change housing policy on affordable homes – subtly but importantly – to include funding for ‘social’ as well as ‘affordable’ council homes to rent.
Help to buy
The additional spending comes after Chancellor Philip Hammond announced on Monday that the government is to spend an additional £10 billion to expand the Help to Buy Equity Loan scheme “due to the popularity of the scheme across the country”.
The scheme, which was launched in 2013 and enables buyers to secure a newbuild property with a 5% deposit and a maximum equity loan of up to 20% of the property’s value.
Philip Hammond (pictured, left) said it will enable an extra 135,000 more mainly first-time buyers to purchase homes over the next four years.
Research by the Home Builders’ Federation revealed last week that the Help to Buy scheme now accounts for one in every 12 of all households making their first step on to the property ladder and is responsible for increasing new homes supply by 50% since 2013.
“Anything that is designed to help the housing crisis should be welcomed,” says Jeremy Dunscombe, Director of Legal & General Mortgage Club (pictured, right).
“The under-supply of housing in this country continues to put serious pressure on prices and affordability across the market. A pledge to build affordable homes, whatever the tenure, can only help the solution.”