The government will introduce a £7.1 billion national home building fund, Chancellor Rishi Sunak has revealed in the latest spending review.
The investment is to support new housing from 2021-22 and the review provides nearly £20 billion in multi-year capital investment to underpin the government’s long-term housing strategy.
As part of the £7.1 billion fund, £100m of funding will be provided for brownfield sites, supporting house building on land that may be less attractive such as ex-industrial sites.
There will also be £2.2 billion of loans for SME and innovative housebuilders to support new housing in areas where it is needed most.
The government also reconfirmed its £12.2 billion for the Affordable Homes Programme which will deliver up to 180,000 new homes for affordable homeownership and rent, with a greater proportion outside of London than the previous programme.
John Goodall, chief executive of of buy-to-let lender Landbay said: “In a year that has seen the highest borrowing in peacetime history, the housing market has held up remarkably well. Buoyed by the stamp duty holiday, demand to buy still outstrips the supply of housing by some margin, so the need to increase the housing stock grows ever more urgent. The Chancellor’s £7.1bn national home building fund is a step in the right direction but needs to translate into action, so we really see more homes being built and quickly. "
Dean Clifford, co-founder of Great Marlborough Estates, said: “The extra funding support housing delivery announced today is welcomed as there is still a national housing shortage amplified across all generations of stock, whether it’s homes for first time buyers, families and downsizers."
He added: "However, the devil is in the detail and it is equally important that government doesn’t water down planning reforms or compromise on design standards that would reduce the quality of new homes built.”
Adam Lawrence, chief executive of developer London Square, said: “The Chancellor's commitment today to £20bn investment to support housing is good news but we now need to see funds moving quickly into the sector, if there is to be any tangible impact over the next two years on the delivery of much-needed new homes.”
What was not included was an extension to the stamp duty holiday due to expire at the end of March 2021, something some builders and estate agents have called for.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Further support for first-time buyers when the stamp duty concession ends and Help to Buy Part 2 begins in the spring, are other areas which could help keep transaction numbers up. Their value to the wider economic recovery, particularly employment, has proved so crucial in recent months.”