Last updated: 25 September 2017
At a glance
- The previous coalition government’s housing policy priority was “to rectify a situation where lenders couldn’t lend, so builders couldn’t build and buyers couldn’t buy.” To do this, it introduced a number of policies aimed at increasing the supply of newbuild property, including self-build and custom housebuilding, supported and enabled through the Self-build and Custom Housebuilding Act 2015.
- The Conservative government’s 2015 General Election manifesto stated their aim to at least double the number of custom-built and self-built homes by 2020, and take forward a new Right to Build - requiring councils to allocate land to local people to build or commission their own home.
- This policy page draws together a number of newbuild issues that affect mortgage lenders and can be found on the tabs on this page.
- Following the Autumn Statement 2016, the government announced that it is preparing a comprehensive set of housing measures to address the needs of people at different stages of their lives, to ensure a housing market that works for all. The Autumn Statement detailed investment of over £7.2 billion in housing - this will effectively double annual capital spending on housing.
- This increased investment will mean a corresponding increase in the number of new homes being built and a breakdown of the additional investment has been announced by government as:
- a new Housing Infrastructure Fund of £2.3 billion to unlock new housing supply with the potential to deliver up to 100,000 homes
- £1.4 billion to deliver an additional 40,000 affordable housing starts by 2020 to 2021 - in addition, the government will relax restrictions on grant funding so providers can deliver a mix of homes for affordable rent and low cost ownership, to meet the housing needs of people at different stages of their lives
- £2 billion of funding to pilot ‘accelerated construction’ to speed up house building on surplus public sector land (£1.7 billion once Barnett Consequentials are factored in)
- £1.8 billion of extra spending by Housing Associations from sources other than central government
Why this is important for lenders
Lenders have to make individual lending policies with regard to the construction methods used for properties; taking into account the views of other professionals, such as building warranty providers, valuers and insurers.