Government's £3.3bn affordable homes package to deliver 165,000 new homes

The package will include an extension of the Government's Affordable Homes Programme by investing £957 million capital funding each year from 2015/16 to 2017/18, the Treasury has announced in its 'Investing in Britain's Future' (82-page / 3.42MB PDF) paper which was published today.

A new Affordable Rent to Buy scheme will be launched under which £250m in 2015/16 and £150m in 2016/17 will support new affordable homes for rent and subsequent sale. The Homes and Communities Agency (HCA) will be allowed to charges fees for its regulation services, which the Treasury said would strengthen its capacity to regulate an "increasingly diverse" sector.

The paper confirmed that the Government's drive to release public sector assets to the private sector will include the release of at least £5bn of land and property between 2015 and 2020. A further £10bn of corporate and financial asset sales will contribute to the Government's aim to reduce public sector net debt, it said.

A range of policy changes will support the delivery of the public land releases. These include centralising disposals in the HCA, introducing a 'Right to Contest' under which local communities and businesses can challenge the Government to release land and introducing a 'Strategic Land Review' where industries and councils can help identify land for release.

The paper also set out details of the Help to Buy scheme announced in March as part of the 2013 Budget. It said that the £3.7bn investment into the equity loan part of the scheme would comprise £1.3bn to be provided in 2015/16, with an expected 74,000 new build sales to have been supported through the scheme by that time.

The paper confirmed that the Government has asked UK Asset Resolution to administer the mortgage guarantee part of the scheme, which will be launched in January next year. It said that the Treasury is working in consultation with industry and regulators to develop detailed scheme rules.

Chief Secretary to the Treasury Danny Alexander said in a speech to the House of Commons today that the affordable housing investment was the "most ambitious and significant investment in affordable housing for a generation".

"Our new approach to housing is truly transformative," he said. "Our Help to Buy scheme is already getting people onto the ladder. But put simply, this country does not have enough homes that people can afford. A good home should not be a luxury for the few, but an achievable aspiration for the many."

"But our housing associations have told me they can do more. To do this, they need certainty on rents alongside public investment. Today I can do both of these things. I can guarantee social rents will be set at CPI+1% out to 2025. That’s the longest period ever." Alexander said.

"And I can provide £3bn more capital over three years from 2015 to deliver 165,000 new affordable homes. On average, that’s more each year than in any of the last 20 years," he added.