Will £8.6 Billion of Government Funding Boost Affordable Homes?

With the government announcing funding to help people get onto the property ladder, Housing Industry Leaders looks at how the £8.6 billion will help the housing sector.

Thousands of people will be helped onto the housing ladder as funding worth £8.6 billion is allocated across the country.

The Affordable Homes Programme funding comes as part of the largest single investment in affordable housing in a decade, delivering around 119,000 homes, including 57,000 for ownership, 29,600 for social rent and 6,250 affordable rural homes.

It could also support up to 370,000 jobs across the country for homebuilders, SME developers, and wider businesses supporting the house building industry such as electricians and plumbers and is expected to generate up to £26 billion of other private and public investment.

The funding hopes to help many more first-time buyers into homeownership

Around half of the new homes from this £8.6 billion funding will be available for affordable homeownership, helping young people and families to get a foot on the housing ladder.

This follows other government schemes to help first-time buyers into homeownership including First Homes, offering new homes at a 30% discount on the open market value, and the 95% mortgage guarantee scheme, which helps first-time buyers secure a mortgage with just a 5% deposit.

Former Housing Secretary Robert Jenrick  MP told Housing Industry Leaders: “Creating more opportunities for homeownership is central to this government. This funding is a landmark moment for our Affordable Homes Programme and will ensure good quality housing for all as we build back better after the pandemic.”

This huge funding package will make the ambition of owning a home a reality for families by making it realistic and affordable.

“We are also ensuring tens of thousands of new homes for rent are built in the years ahead, including social rent, so those on the lowest incomes can enjoy good quality, secure rented homes, built and managed by reputable providers.”

The funding will also deliver nearly 30,000 homes for Social Rent

Typically 50% to 60% of market prices, Social Rent homes provide secure, affordable housing to people who need it most. It will also deliver new supported housing for some of the most vulnerable, providing much-needed homes for older or disabled people with support needs.

Nearly £5.2 billion of the package announced today will be delivered outside London by Homes England, the government body responsible for housing delivery.

CEO of Homes England Peter Denton told Housing Industry Leaders: “Not only does today’s announcement give our new Strategic Partners the funding, flexibility, and confidence they need to build much needed affordable homes across the country, it also establishes a large network of organisations looking to share their skills and capabilities to expand the affordable housing sector and transform communities.”

By forming Strategic Partnerships with a wide range of public and private organisations, we are creating the conditions needed for institutional investment to catalyse affordable housing supply and in future give local authorities more of the tools they need to plan and act strategically, shaping their communities and building new homes.

Nearly 90 new partnerships – made up of councils, housing associations and private providers have successfully bid for their share of programme funding, but have not yet been announced.