A Government-backed loan fund known as the affordable homes scheme is set to receive a £3 billion boost, expected to result in the creation of 20,000 new homes. This funding increase comes as part of a series of Government housing announcements made this week.
The affordable homes scheme aims to provide providers, including local authorities, with access to lower-cost fixed-rate debt, ultimately increasing the supply of affordable housing. This includes homes for social rent, affordable rent, and shared ownership. Notably, this scheme can now also be utilized to renovate existing properties, such as through energy upgrades, to ensure they are comfortable and of good quality for tenants.
Housing Minister Lee Rowley expressed the importance of cost-effective loans for developers in constructing more affordable homes and improving existing housing stock. He stated that the latest funding round will not only enhance the lives of current residents but also benefit numerous families by providing new, high-quality, affordable housing.
The uplift in funding brings the total sum of the affordable homes scheme to £6 billion. It is one of several housing-related announcements by the Government this week. In addition to extending loans to housing associations, the Government aims to develop at least 20,000 new social homes, adding to the £11.5 billion allocated in the affordable homes program, which provides grant money directly to local authorities and housing associations to increase the availability of homes.
While Housing Minister Lee Rowley could not guarantee a decrease in the number of individuals living in temporary accommodation before the general election, he assured that the Government plans to implement a long-awaited ban on no-fault evictions by then. The ban on section 21 evictions, which allow tenants to be evicted without reason, was initially pledged by Ministers in 2019 but has yet to be passed.
Acknowledging the challenges faced by young people struggling to enter the housing market, Cabinet Office Minister Michael Gove noted that being shut out from homeownership could lead to feelings of frustration and potentially foster support for authoritarianism among younger generations.
To encourage the construction of new homes, Prime Minister Rishi Sunak’s Government opted to make the target of building 300,000 homes in England each year advisory, rather than imposing compulsory housing targets. This decision was made to avoid potential opposition from backbench Tory MPs, as construction consistently fell short of the target.
This £3 billion boost to the affordable homes scheme represents a significant step towards bridging the gap in affordable housing provision. By facilitating access to cost-effective loans and supporting both the construction of new homes and the renovation of existing properties, the Government aims to improve living conditions and offer more affordable options for families across the country.
