Government unlocks £7bn for affordable homes

Communities secretary Sajid Javid has announced the unlcoking of £7bn of funding to follow through on the recent expansion of the government’s programme to provide more affordable housing.

Allocated an additional £1.4bn in the 2016 Autumn Statement specifically for the delivery of 40,000 new affordable housing starts, housing providers across the country are now able to apply for a share in the fund.

This assistance geared towards providers is intended to give enough flexibility and programme options to enable local needs and markets to be accounted for within the providers’ approach to solving local, and subsequently UK-wide housing challenges.

Javid said: “Our newly expanded affordable housing programme, turbo-charged by a multi-billion pound investment, will allow housing associations to build more homes in places where they are most needed, particularly for families who are just about managing.”

With recent changes the government’s programme to address the UK’s housing challenges was expanded to not only aid those attempting to provide affordable homes but also to aid those that need more affordable housing options or assistance getting on the property ladder.

The unlocking of the £7bn comes shortly after the Local Government Association released survey results in December showing that home ownership among 25-year-olds in the UK has fallen by more than half within the last 20 years, with just 20% of those aged 25 owning their own property compared to 46% in 1996.

With the average UK private renter spending 34% of their household income on rent and homeowners spending 18% of their household income on a mortgage, increased homeownership could release additional finances throughout the UK. However, for property to be purchased and mortgages to be obtained deposits must be obtained which per local authority is approximately 62% of annual household incomes for those outside London, or 131% of annual household incomes for those living in London – making it essential to have affordable renting initiatives as well as programmes geared towards increased ownership.

The expanded governmental programme to help individuals achieve an affordable form of housing includes the Help-to-buy ISA, Affordable Rent, Shared Ownership and Rent to Buy initiatives.

The government hopes that the expansion of assistance options will address the many hurdles to housing being affordable, whether to rent or to buy.

“By encouraging the delivery of more homes under a variety of tenures, we can create a housing market which truly works for everyone, meeting the diverse housing needs of this country,” said Javid.