This Commons Library Briefing Paper summarises Government initiatives to stimulate housing supply in England since 2010.Jump to full report >>
The Government’s ambition is to deliver 1 million new homes over the next 5 years. The Department for Communities and Local Government’s Single Departmental Plan sets out plans to build 400,000 affordable homes (including Starter Homes), increase housing supply by improving the planning process, bring forward public sector land, and help small builders.
A number of initiatives are focused on facilitating the purchase of housing, particularly by first-time buyers, through the introduction of savings products such as the Help to Buy and Lifetime ISAs, and also through equity loan and mortgage guarantee schemes. A key commitment is to build 200,000 new Starter Homes by 2020 which will be available at a 20% discount off the market price to first-time buyers between the ages of 23 and 40. Much Government effort to stimulate house-building is also focused on planning measures – for detailed information on these aspects see Library Briefing Papers Planning for Housing (03741) and Planning Reform Proposals (06418).
Housing output (new-build and net additions to the stock) increased in 2014/15 but was still some 50,000 below the level required to match the 2012–based household projections. It is estimated that around 300,000 homes per year need to be built for five years in order to address some of the historic shortfall in supply.
A significant development since 2010 is that much of the financial support provided by the Government for stimulating housing supply is available in the form of repayable loans rather than grant funding. A further development since General Election 2015 is the Government’s focus on the development of housing for sale in order to increase levels of home ownership. This has led commentators to question whether initiatives such as Starter Homes, and the concentration of Affordable Homes Programme funding beyond 2018 on shared ownership, will provide a sufficient tenure mix in order to meet the wide range of housing needs. It is suggested that policies such as the extension of the Right to Buy to housing association tenants and the requirement on social landlords to reduce their rent levels, resulting in reduced funds for reinvestment in existing or new stock, will recast social renting in “an ever-more marginal role within the wider housing market.”
Housing commentators have also questioned whether certain Government policies, such as the aforementioned requirement on social housing providers to reduce their rent levels, are actually counterproductive, as they may lead to the development of fewer affordable homes.