The Ministry of Housing, Local Government and Communities has announced the launch of a publicly owned National Housing Bank, which aims to build over 500,000 new homes.
With the UK dealing with a problem-stricken housing sector which includes issues such as millions stuck on social housing waiting lists, a shrinking private rental sector, and the average age of a first-time buyer now at 34, the government has made fixing the housing sector one of their top priorities since coming to power.
Let’s find out more about the National Housing Bank and what it is slated to do.
What is the objective of the National Housing Bank?
A combination of public and private sector investment
Part of the government’s “Plan for Change”, the National Housing Bank will be backed by £16bn worth of public investment. This eye-catching figure is in addition to £6bn of additional investment which has already been allocated this Parliament.
The National Housing Bank will also seek to leverage £53bn of private investment to support the building of 500,000 homes. It will act similarly to a development bank through the use of low-interest loans, guarantees and investment in housing projects.
This partnership with the private sector will add much needed stability and reassurance for housing developers and investors.
Furthermore, the recent £2.5 billion in low-interest loans announced at the recent spending review will also form a core part of the support for the building of social and affordable homes.
Greater Autonomy for Homes England
This new strategy will give Homes England, which is the government’s housing and regeneration agency, greater autonomy to make long-term investments as well as the capability to issue government guarantees directly. The hope is that this will create a more streamlined, efficient system which will accelerate housing delivery.
Collaboration with mayors and local leaders will be encouraged in the form of integrated financial support packages to ensure that housing and regeneration priorities are delivered on across the country. As part of this, an unspecified portion of the £16bn may be allocated to the Greater London Authority or Mayoral Strategic Authorities.
Following the announcement, the Deputy Prime Minister and Housing Secretary Angela Rayner said:
“We‘re turning the tide on the housing crisis we inherited – whether that’s fixing our broken planning system, investing £39 billion to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment.
“This government is delivering reform and investing in Britain’s renewal through our Plan for Change. Our foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership – or ensuring children don’t have to grow up in unsuitable temporary accommodation, and instead have the safe and secure home they deserve.”
Our thoughts
The creation of the National Housing Bank represents a serious, substantive attempt to address the UK’s housing crisis. We welcome action taken to bolster the UK’s housing stock and property market, with the aspiration of secure housing currently out of reach for so many people, particularly in London.
The government has set itself a target of 1.5 million new homes by the end of the Parliament, representing 370,000 per year. This is beyond what any government has managed for half a century, so it remains to be seen whether this will be achievable. They will hope that the National Housing Bank can play a crucial role in helping them to achieve this lofty ambition.
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