Social Housing Speed Read – Government invest £866 million into local housing projects

What has been announced?

Housing Secretary Sajid Javid and Chancellor of the Exchequer Philip Hammond have announced that 133 projects led by local councils nationwide will receive funding to support housing developments in an attempt to get homes built quicker towards the target of 300,000 new homes being built a year by the middle of the next decade.

This first wave of investment will come from the £5 billion Housing Infrastructure Fund which creates part of the complex strategy to fix the housing crisis. The Housing Infrastructure Fund is a capital grant aimed at unlocking new homes in areas across the country with high housing demand and need.

What is the funding for?

The funding is primarily aimed at making sites viable for development and includes new roads, cycle paths, flood defences and land remediation work. The following are examples of some of the projects receiving the funding:

• £10 million for highway infrastructure to unlock further development in Leicester resulting in a further 3,300 homes
• £10 million for the construction of a bypass in Hampshire which will help unlock 1,000 new homes
• £3.6 million for drainage works, new roads and footpaths in Sheffield to enable over 400 homes
• £6.5 million towards a new primary school in Devon to support 750 new homes

Funding from the Housing Infrastructure Fund will be awarded to local authorities on a competitive basis. It is divided into the following two streams:

• A Marginal Viability Fund – available to single and lower tier local authorities. Bids for funding in this stream can be up to £10 million towards infrastructure to have new sites allocated or unblock existing sites quicker.
• A Forward Fund – available to the upper tier of local authorities. Bids for funding of up to £250 million can be made for strategic and high impact infrastructure projects.

The Government together with Homes England have assessed bids from the local authority based on their deliverability, benefits costs ratio and their strategic ambition. Details of the bids can be found on the MHCLG website.

What is the effect of this?

The financial support will help local projects get underway which would otherwise be economically unviable. The Government intends the funding of these projects to help prevent delay in provision of the communities and homes the country needs and to stimulate economic growth.

Speaking at the announcement, Philip Hammond said “This fund […] will kick-start housing development in some of Britain’s highest demand areas […] this support will help us meet our ambitious plan of building 300,000 new homes each year and ensure we have enough housing in areas which need it most”.

Sajid Javid said “The first wave of investment totalling £866 million will help get up to 200,000 homes off the ground […] this is just one of the many ways this government is taking action to get Britain building again.”

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.