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Government to use grant funding for 12,500 socially rented homes
The government has revealed that £1.67bn of previously announced housing funding will be used to build 23,000 affordable homes, including 12,500 for social rent.
This morning the government will announce what it has termed a “£1.67bn social housing deal” for 23,000 new homes across England but outside London.
It will also publish the long-awaited bidding criteria for £1bn of additional borrowing headroom designed to help fund council house building projects.
This £1.67bn comes from a total of £9.1bn set aside for affordable housing projects through to 2022.
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However, the government did not provide a breakdown of how this £9.1bn is now being allocated between its various programmes.
It declined to provide details on whether this cash is from the £2bn for social housing announced by Theresa May in October, or another source.
Asked to clarify these points, a spokesperson confirmed only that £9.1bn is being invested in affordable housing in total and that the money referred to in today’s announcement is being taken from that total pot, and that Ms May announced £2bn for social housing in October.
The government announcement said bidding would now open for this £1.67bn and the £1bn of borrowing headroom for councils.
It said it hopes “the majority” of the homes will be in “high cost” areas, but it gave no detail on how this would be defined, or how it would be introduced into the bidding criteria.
There was also no detail given on what tenure it intended the remaining 10,500 homes to be.
James Brokenshire, housing secretary, said: “The government has ambitious plans to fix the broken housing market and build the homes our communities need.
“Today’s announcement is a further milestone. It will secure the delivery of an additional 23,000 much-needed affordable homes as well as paving the way for a new generation of council houses.
“The majority of these new homes will be in high-cost areas, helping to ease the burden of rent on hard-working families and delivering stronger communities.”
The government recently allocated £400m to fund the removal of cladding from social housing tower blocks, which will be taken from its overall investment in affordable housing and topped up in the next funding round.
Funding of £1.67bn for 23,000 homes would represent an average grant rate of more than £70,000 a unit, well in excess of previous central government grant rates.
The government said the £1bn of additional borrowing headroom would be split equally between London and the rest of England.
Reacting to the publication of the bidding criteria for the £1bn of borrowing, Martin Tett, housing spokesperson for the Local Government Association (LGA), said: “The LGA has been clear that councils must be given greater freedom to borrow to build desperately needed new homes in their local areas and play a leading role in solving our housing shortage. Today’s announcement is a positive step in the right direction towards triggering the renaissance in council housebuilding that we urgently need to ensure more affordable, secure and stable homes for everyone.
“The next step for the government now is to accept the calls of the LGA and the influential Treasury Select Committee to scrap the cap on council borrowing in every community across the country.”