Increasing housing supply

The government has pledged to increase the supply of housing, in order to:

  • meet housing need
  • reduce the long-term upward trend in house prices
  • achieve a more stable housing market to provide better conditions for economic growth
  • improve the affordability of housing enabling more people to buy their home.

The 'new settlements' programme comprising growth areasGlossary: There are four growth areas in England, which were outlined in the government's 2003 Sustainable Communities Plan. These are geographical areas where a substantial proportion of new housing will be built , growth pointsGlossary: Growth Points are areas identified by the central government department of Communities and Local Government (CLG) as being suitable for housing development. , second round growth pointsGlossary: Growth Points are areas identified by the central government department of Communities and Local Government (CLG) as being suitable for housing development. and eco-townsGlossary: are proposed new towns of up to 20,000 homes which are intended to be best-practise examples of environmentally friendly development form part of the government's housing growth strategy.

National targets have been set for new housing and for affordable housing, rented and shared ownership, and further support has been made available through the national affordable housing programme up to 2011. New ways of maximising value for public money are being explored including making use of available public land and local housing companies to bring partners together to deliver housing on local authority-owned land. Other measures for increasing supply include:

  • incentives for councils to deliver land sites and new homes such as through the Housing and Planning Delivery GrantGlossary: The Housing and Planning Delivery Grant (HPDG) is designed to reward local authorities for improved delivery of housing and other planning outcomes as part of their strategic, place shaping role
  • advice to regions provided through the National Housing and Planning Advice Unit Glossary: The National Housing and Planning Advice Unit (NHPAU) was set up to help make market housing more affordable and to address the trend in the rise in the number of people prevented from getting onto the property ladder (NHPAU)
  • a review of the Regional Spatial Strategies to increase the number of new homes.

Certain standards will apply to all new homes and these are brought together in the Code for Sustainable HomesGlossary: used to evaluate the environmental sustainability of a home (CSH). These include space, low carbon and Lifetime Homes standards.

Challenging global financial conditions

The current global financial crisis and other factors has severely restricted new mortgage loans, particularly to first time buyers. The resulting low pace of sales is affecting developers' financial plans and is, in turn, severely reducing developers' ability to provide new housing.

In an effort to minimise the impact this is having on meeting housing targets, the government has introduced a number of measures to maintain momentum in the housing market and keep housing development on track. These include:

  1. Plans to bring forward £775m housing and regeneration capital spending that will support the construction industry over the next two years. A large portion of the money will be used to build new homes for social rent, complete regeneration programmes and improve and repair social housing, including measures to increase energy efficiency
  2. A new national clearing house - managed by the Homes and Communities Agency - to facilitate sales (by developers) and purchase (by housing associations) of unsold stock for affordable housing. The Government has also committed £200m so far to support these purchases
  3. Increasing flexibility around timing of funding - helping to increase the pace of approvals, improve providers' cash flow, encourage new starts, and stimulate wider market activity
  4. Further money to support the Housing Private Finance Initiative - councils will be able to bid for a share of up to £1.87bn to build new homes or refurbish existing houses.
  5. A range of measures, supported by a fund of £200m, to assist up to 6,000 households who are at risk of homelessness because of mortgage or second charge default have also been put in place.