Chancellor doubles housing budget in Spending Review

Chancellor, George Osborne, has doubled the housing budget and pledged to build 400,000 affordable new homes by the end of the decade.

The affordable housing package in the combined Autumn Statement and Spending Review set out plans to build 200,000 starter homes with 20% discounts for under-40s, 135,000 shared ownership homes, 10,000 rent-to-buy homes and 8,000 specialist properties for the elderly and disabled.

The chancellor called the house building programme the biggest since the 1970s.

“In the end Spending Reviews like this come down to choices about what your priorities are. And I am clear: in this Spending Review, we choose to build.

“First, I am doubling the housing budget. Yes, doubling it to over £2 billion per year. We will deliver, with government help, 400,000 affordable new homes by the end of the decade,” he said.

The spending package includes direct subsidies of up to £2.3bn to developers to spur them into building 200,000 starter homes — properties for sale to first-time buyers at a 20% discount to their market value.

A new ‘London Help to Buy’ scheme was also unveiled, which will enable Londoners to get an interest-free loan worth up to 40% of the value of a newly-built home.

A further £400m is earmarked to help build 8,000 specialist homes for older people or those with disabilities.

135,000 will go towards the Government’s new ‘ Help to Buy: Shared Ownership’ scheme, which it said will remove many of the restrictions on shared ownership – who can buy them, who can build them and who they can be sold on to. The Government also said it will to extend the Right to Buy to housing association tenants.

Plans to reforms the planning system so it delivers more homes more quickly were also revealed.

“We’re releasing public land suitable for 160,000 homes and re-designating unused commercial land for Starter Homes,” the chancellor added.