The government will today announce a £3bn housebuilding fund that will combine cash from several existing funding streams and provide £1.15bn of new loan finance.
At the Conservative Party conference today, Sajid Javid, communities secretary announced details of the long-awaited Home Building Fund, ahead of a new housing white paper later this year. Mr Javid confirmed a further £2bn of funding for a scheme called ‘Accelerated Construction’ under which the government will take direct action to build homes.
Of the £3bn Home Building Fund, £1.15bn will consist of new loans, the government has confirmed. The Homes and Communities Agency runs several funding streams to support building, including the £525m Builders Finance Fund, the £1bn Large Sites Infrastructure Programme and Build to Rent.
These funds will be rolled up into the pot, but the government is also providing an extra £800m for long-term loans and £325m for short-term loans.
Of the £3bn, £1bn will be available for small and custom builders, which the government says will generate 25,500 new homes. A total of £2bn will provide long-term funding for infrastructure.
Mr Javid will pledged to step in and take direct action to build homes by encouraging alternative models of housebuilding to support small builders.
Ministers say the new approach, called ‘Accelerated Construction’, will deliver up to 15,000 homes in this parliament on surplus public sector land.
The government says Accelerated Construction will cost £2bn in the short term, however it is unclear how much of this has already been announced.
Ministers are also intending to use land differently, such as expecting equity from developers upon a sale of land instead of an upfront receipt, to lower the developer risk.
In a change to national housing policy, the government is also planning to create a presumption for housing development on suitable brownfield land, and to increase density in high demand areas.