In his letter Shapps points out that despite the fiscal constraints, the government is still investing nearly £6.5bn of taxpayers’ money in housing, with £4.5bn to fund new affordable homes over the spending review period.
Details in the letter include the announcement that £200 million will be provided to keep the Mortgage Rescue scheme open and that a further £100 million will be targeted at bringing empty homes back into use.
In November, the Communities and Local Government department will launch a consultation into how a New Homes Bonus scheme should be structured before being launched next April.
The scheme will see over £900 million of funding reserved to match fund the council tax on every new home built by local authorities over the six years following launch. Local authorities will also be able to borrow against tax revenues and have access to a Regional Growth Fund to fund capital projects which could support housing growth and market renewal schemes.
Shapps also reiterates Osborne’s announcements that existing social tenants would retain their security of tenure but new social tenants may be given the option of “Affordable Rent” and have to pay up to 80% of market rate rents and have limited tenure in council homes.
He writes: “We need a more flexible system of affordable housing – offering stability when it’s needed; helping people move for work; and protecting vulnerable households. And given the huge pressures on the public finances, we also need to find ways of making limited public investment go further.”
Shapps also said the government will invest over £2 billion of capital funding to help towards completing the Decent Homes programme and reform the Housing Revenue Account.
He concludes: “All in all, I believe that the Spending Review provides the conditions for a thriving, fair and sustainable housing sector whilst fulfilling the Government’s commitment to reducing the public deficit and decentralising power.
“I know the housing sector will step up to the challenges ahead: I will do what I can to help you meet them and that is why I have asked the CLG housing team to work closely with you and your colleagues in the development and delivery of policy in the weeks and months ahead.”
