Additional £1.4bn of affordable housing cash as restrictions lifted

The government had trailed its plans to provide £1.4bn of cash for 40,000 new affordable homes of multiple tenures, including rent, before the Autumn Statement today.

But detailed documents published alongside the Statement reveal the relaxed restrictions on funding will apply to the current Affordable Housing Programme, while the £1.4bn is new cash.

This follows concerted lobbying since the EU referendum by the housing sector, with the National Housing Federation making an unprecedented pledge to deliver more homes if the government relaxed restrictions.

However, modelling by the Office for Budget Responsibility said this would likely reduce building by housing associations by 13,000 over the forecast period, a "boost next year becoming a drag by 2019/20".

This will allow housing providers to build affordable rented homes and homes for low cost ownership "to meet the housing needs of people in different circumstances and at different stages of their lives", the document said.

The government announced a National Productivity Investment Programme, which will include an extra £1.4bn to deliver 40,000 housing starts by 2020-21.

Chancellor Philip Hammond said the country’s housing "challenge" is an "urgent issue" because it affects national productivity. Last week the government published figures which revealed the lowest level of affordable housing was built last year since 1992.

David Orr, chief executive of the National Housing Federation, said: "Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, including for rent, more quickly across the country."

Terrie Alafat, chief executive of the Chartered Institute of Housing, said: "The extra investment to support the building of 40,000 new affordable homes and the greater flexibility in funding for housing providers to build homes of all tenures, both of which we had asked for, are particularly welcome."

Chancellor Philip Hammond announced £3.15bn will be given to London to deliver 90,000 affordable homes.