Thousands of affordable homes in £8.6bn scheme

Drive to get more young people on the property ladder using shared ownership contracts

ALMOST 120,000 affordable new homes will be built as part of an £8.6bn Government building drive to get more young people on the housing ladder.

Robert Jenrick, the Housing Secretary, said the funding would deliver 57,000 new homes for ownership, along with nearly 30,000 for social rent below the market rate.

The new homes for sale will be sold through shared ownership, officials confirmed, enabling first-time buyers to purchase a smaller stake in the property while paying rent on the rest.

Another 6,250 affordable homes will be built in rural towns and villages with populations below 3,000, and divided into a combination of shared ownership properties and rent.

The remaining homes will be available for “affordable” rent, officials said, which are typically set at 80 per cent of the market rate.

The funding is part of the £11.5 billion affordable homes programme which runs from 2021 to 2026 and could provide up to 180,000 new homes. It forms part of Boris Johnson’s vow to deliver 300,000 homes a year by 2025, with ministers also seeking to overhaul Britain’s planning system in order to ease the country’s housing crisis.

Of the funding allocated last night, £5.2bn will be distributed in regions across the country by Homes England, the affordable housing body, while the remaining funding will go to the Greater London Authority.

Nearly 90 partnerships across England, including councils, housing associations and private providers, successfully bid for a share of the cash.

Mr Jenrick said: “Creating more opportunities for home ownership is central to this Government.

“This £9 billion funding is a landmark moment for our affordable homes programme and will ensure good quality housing for all as we build back better after the pandemic.

“This huge funding package will make the ambition of owning a home a reality for families by making it realistic and affordable. We are also ensuring tens of thousands of new homes for rent are built in the years ahead, including social rent, so those on the lowest incomes can enjoy good quality, secure, rented homes, built and managed by reputable providers.”

Shared ownership properties are targeted at first-time buyers and work by enabling them to purchase a stake typically of between 25 and 75 per cent.

This enables them to take out a smaller mortgage, while continuing to pay a smaller rent to a landlord.

Social rent homes are usually owned by housing associations or local authorities, with tenants paying a reduced rent typically set at about 50-60 per cent of the market rate.

The package comes on top of similar initiatives launched earlier this year, including “first homes”, which will be made available to first-time buyers and key workers at a 30 per cent discount.