Housing and Growth - October 2012

SUMMARY

On 6th September 2012, Prime Minister David Cameron, Deputy Prime Minister Nick Clegg and Secretary of State Eric Pickles, set out a major housing and planning package. This paper summarises that package.

The package included:

• A £40billion guarantee for major infrastructure projects and £10billion to housing associations and developers for new homes.
• Up to 70,000 new homes, including affordable housing and opportunities for first-time buyers to get onto the housing ladder. The affordable homes will be supported with £300million in capital funding for 15,000 affordable homes and 5,000 empty homes.
• An additional £280million for the Firstbuy scheme for first time buyers
• £200million for the private rented sector.
• Developers to be allowed to renegotiate section 106 agreements to start stalled schemes and measures to reduce planning delays.
• 140,000 jobs and a boost to the construction sector

This new package is said to include a series of measures aimed at supporting businesses, developers and first-time buyers, while slashing unnecessary red tape across the planning system.

The government clearly sees the expansion of the private rented sector as the main way in which housing supply can be increased in the medium term with most of the guarantees being available for private sector development. Increased affordable housing is seen as playing a supporting role.

The government also sees planning restrictions and ‘red tape’ as constraints on the development of new housing. However, others are unconvinced by this argument and point out that many housing developments have already received planning permission but have not been started for economic reasons. There are also fears that the relaxation of rules surrounding section 106 agreements will result in a reduction in affordable housing and may not result in an increase in market housing.

To download a copy of the full briefing paper please click here.