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New £7 billion Home Building Fund – but no news on tax rises

The government committed to £20bn of spending on new housing from 2021-22 in today's Spending Review including a new Home Building Fund - but how are they going to pay for it?

2 minute read

home building fund

The Chancellor has announced more money for housing today, notably the introduction of a £7.1bn National Home Building Fund. The government also confirmed the commitment of £12.2bn for the Affordable Homes Programme.

Here at the HomeOwners Alliance, we welcome more money to increase the supply of new homes, especially for those struggling to afford a roof over their heads. The government needs to ensure affordable, safe, quality homes are built where people want to live.

But the Spending Review made no mention of how this (and other coronavirus related financial support for the economy) will be paid for. Changes to Capital Gains Tax and the end of the stamp duty holiday look increasingly likely.

The Chancellor’s speech today focused instead on public spending.

The £20 billion in capital investment, will go to the following areas:

  • a National Home Building Fund (NHBF), with initial funding of £7.1 billion over the next 4 years to unlock up to 860,000 homes, including:
    • £2.2 billion of new loan finance to support house builders across the country. This includes delivering Help to Build for custom and self-builders, and funding for SMEs and modern methods of construction
    • confirming already announced £4.8 billion of capital grant funding, including for land remediation, infrastructure investment, and land assembly
    • delivery of the Brownfield Fund, announced in the Budget for Mayoral Combined Authorities (MCAs)
    • an additional £100 million for non-Mayoral Combined Authorities in 2021-22 to support housing delivery and regeneration, including unlocking brownfield sites, regenerating estates and releasing public sector land – including serviced plots for self and custom builders
    • further funding for the NHBF will be confirmed at the next multi-year spending review, delivering on the government’s commitment to provide £10 billion to unlock homes through provision of infrastructure
  • reconfirming £12.2 billion for the Affordable Homes Programme (AHP). The new AHP will deliver up to 180,000 new homes for affordable homeownership and rent, with a greater proportion outside of London than the previous programme.

Consumers and campaigners for a fairer deal for leaseholders, and those suffering from the post-Grenfell cladding scandal which has left hundreds of thousands of homeowners facing bankruptcy and unable to sell, are rightly outraged to have been ignored in today’s Spending Review.

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