Supplementary memorandum by the Department
for Communities and Local Government, the Homes and Communities
Agency and Tenant Services Authority (CRED 60A)
1. This memorandum responds to the Committee's
letter on Housing and Credit Crunch of 18 December 2008. The letter
formally noted the points on which further evidence was requested
at the oral evidence session on 16 December 2008. Below is the
follow on information as requested.
A summary of all the different low cost housing
programmes (eg HomeBuy Direct) that are available, setting out
what their characteristics are. Statistics on take up would also
be helpful. (Q58)
2. There are three HomeBuy products based
on equity sharing to offer people a choice in the type of home
they can buy. See Annex A for details.
Statistics on the operation of the National Clearing
House so farhow many unsold units have housing associations
purchased through this scheme? What type of properties (flats,
houses etc) are they? Which regions have seen the highest numbers
of properties purchased in the way? To what extent do these properties
meet the Code for Sustainable Homes requirements for social rented
3. As at 22 December, of the £200 million
earmarked for the purchase of stock from developers, the Housing
Corporation had allocated £160 million which will deliver
almost 4,800 affordable homes. The table in Annex B shows the
developer stock as at 22 December 2008, broken down by flats and
houses (set out by local authority). A regional breakdown is also
at the bottom of the table. Homes and Communities Agency (HCA)
have confirmed that no local authorities (including ALMOs or SPVs)
have bid to buy unsold developer stock with HCA funds.
Please can we see the modelling that has been
done to show what would happen if a large Housing Association
became insolvent? (Q77)
4. The regulatory approach that TSA would
adopt in case of large Housing Associations (HA) becoming insolvent
is set out in detail in Annex C.
Is it possible for the Committee to see the paper
referred to here when it becomes available please? (Q80)
5. CLG officials are currently discussing
the issue of lending to the RSL sector with Treasury and the lenders.
Some of the content of these discussions will be commercially
confidential; however we will be happy to share a summary of the
paper with the Committee when it is completed.
Can you give us an update on the work being done
to help people experiencing "income shock"? (Q83)
6. In December, as part of this wider package
of real help for homeowners, the Homeowner Mortgage Support Scheme
was announced which will enable ordinary hard working households
that experience a redundancy or significant loss of income ("income
shock") to reduce their monthly payments to a more manageable
level, by deferring a proportion of the interest payments on their
mortgage for up to two years.
7. The result will be more affordable monthly
payments for homeowners needing a bridge through difficult times.
The new scheme will help those families who are not eligible for
the existing support for those on benefit, which we are separately
extending next month to offer more help, more quickly.
8. This is a voluntary scheme but already
the country's eight largest lenders, representing 70% of lending,
have expressed interest in the scheme and have pledged to work
with Government to develop it. The Government wants to see all
the lenders join the scheme so that all customers have the option
to stay in their home when they suffer a loss of income.
9. We are now working closely with the lenders
to agree the details of how the scheme will work in practice and
to put into place the necessary legislative, operational and financial
frameworks necessary to get the scheme up and running as soon
as possible. The Government is looking to implement the scheme
in the New Year.
Can you give us an update on the work being done
to close the loophole discussed here? (Q88)
10. The Justice Secretary has ordered officials
to carry out an urgent review of the protections afforded by the
law to homeowners in arrears on their mortgages, with particular
reference to lenders' powers of sale and rights to possession.
The review will assess the scale of the problem of lenders selling
mortgaged properties without court orders and consider whether
the law needs to be reformed. Officials will report to the Justice
Secretary in mid-February 2009.
Please can you give us the numbers of RSLs who
have purchased land at lower values? (Q89)
11. Government does not hold data on RSLs
purchase of residential land. The best data on residential land
value we have is the Valuation Office Agency (VOA) data reported
in July 2008 that between January and July 2008 residential land
values fell by about 15% in England and Wales. Subsequent evidence
of widespread house price falls indicates that land values will
have fallen further as the value of residential building land
is largely derived from the values of homes. We would expect to
see this reflected in the VOA data when January 2009 figures are
12. RSLs can consider investing in purchasing
land from housebuilders on a case by case basis, and they do make
such purchases when the deal allows them to deliver affordable
homes in the most cost effective way.
What measures are you taking to avoid the loss
of skills and capacity in the construction industry?
13. A detailed response is set out in
A summary of the various housing market announcements
over the past year is at Annex E for the Committee's information.
SUMMARY OF HOMEBUY SCHEME
The HomeBuy scheme enables social tenants, key
workers and first time buyers who cannot afford to purchase without
assistance, to buy a share of a home and get a first step on the
There are three HomeBuy products based on equity
sharing to offer people a choice in the type of home they can
1. Open Market HomeBuy enables people
to buy a property on the open market with the help of an equity
loan of up to 50%. Three shared equity options are available.
Purchasers may buy a property of their choice selected on the
open market and use one of the two equity loan products, announced
on the 1 April 2008 (MyChoiceHomeBuy and Ownhome)
or use the new HomeBuy Direct product, announced on 2 September
2008 to buy within specific schemes being brought forward by developers
in early 2009. [The scheme is aimed at couples and those closer
to being able to buy in the market].
2. New Build HomeBuy enables people to
buy a minimum 25% share in a new build property, whilst paying
rent on the unowned share. This includes the new Rent to HomeBuy
which enables prospective purchasers to rent a new build property
on certain sites at below market rent for a pre-specified period,
with the first option to buy the property on New Build HomeBuy
terms at the end of this period. [This scheme is aimed primarily
at single income households and those furthest from buying in
3. Social HomeBuy enables tenants of participating
local authorities and housing associations to buy a minimum 25%
share in their current home at a discount and pay rent on the
All first time buyers with a household income
of £60,000 or less per year, unable to buy a home on the
open market, are eligible to apply for assistance. The scheme
may also help other households, for example, following partnership
breakdown. Further details are set out below.
Interested applicants for the New Build, Open
Market HomeBuy, Rent to HomeBuy and HomeBuy Direct need to contact
the HomeBuy Agent for the area where they live or if a Key Worker,
in the area where they work.
Applicants for Open Market HomeBuy, Ownhome
option, may also contact the equity loan providers directly for
Tenants interested in the Social HomeBuy option
are advised to contact their landlord direct.
Between 1997-98 and 2007-8 the Government has
helped 110,000 households into home ownership through shared ownership
and shared equity.
Take up for the three HomeBuy products between
April 2008 and November 2008, based on completions in that period,
New Build HomeBuy/shared ownership6,101.
Open Market HomeBuy3,398.
Social HomeBuy (demand led)78
(a total of 283 since April 2006).
The Government's aspiration is to help 75,000
households into home ownership through our shared ownership and
shared equity schemes over the next three years, funded mainly
by the Homes and Communities Agency. It remains too early given
current market conditions to predict completed sales over this
period with certainty.
As announced on 15 December, 130 developers
have agreed to offer the new HomeBuy Direct scheme to help up
to 18,000 first time buyers to purchase a home at sites across
England over the next two years aided by an equity loan funded
in partnership with developers.
The launch of HomeBuy Direct offers further
choice to first time buyers and builds on the existing two equity
loans offered under Open Market HomeBuy in partnership with registered
HomeBuy Agents (HBAs) are appointed housing
associations who are providing a "one-stop-shop" and
point of contact for affordable housing options in a given area
in England. They also handle the entire application process for
the Open Market and New Build HomeBuy products.
A list of the HBAs and their contact details
are available on our website.
Equity loan providers are housing associations
who are providing equity loans under the Open Market HomeBuy product
from 01 April 2008.
For the Ownhome Open Market product, the provider
(Places for People) can be contacted directly on 0845 607 0110.
For the MyChoiceHomeBuy Open Market Product,
the provider (Chase) can be contacted through your local HomeBuy
Full details of the scheme are available from
HomeBuy Agents but key aspects include:
Open Market HomeBuy
There are three Open Market HomeBuy productsMyChoiceHomeBuy,
Ownhome offered by appointed equity loan providers and HomeBuy
Direct in partnership with house builders.
An equity loan of between 15 to 50%
of the purchase price is provided by a partnership of 8 housing
associations named CHASE, each one of which is an equity loan
This product can be used in conjunction
with a conventional mortgage from any participating qualified
lender regulated by the Financial Services Authority.
Purchasers may be expected to raise
finance to purchase between 50 and 85% of a home on the open market.
There will be an annual fee of 1.75%
on the equity loan in year one, payable on a monthly basis. The
fee will increase annually by the Retail Price Index (RPI) plus
Purchasers are free to re-mortgage
at any time but will need the equity loan provider's consent if
the loan is still in place.
Owners will need to inform the equity
loan provider when they wish to sell and the provider will then
arrange the valuation.
An equity loan of between 20 to 40%
is provided by Places for People, a Housing Association, in partnership
with Co-operative Financial Services.
This product must be used in conjunction
with a conventional mortgage from the Co-operative Bank in the
Purchasers may be expected to raise
finance to purchase between 60% and 80% of a home on the open
Applicants may also apply direct
to the equity loan provider. If they do so, they will be required
to complete a HomeBuy application form.
There is no interest charged on the
equity loan for the first five years but there will be a charge
of 1.75% from year 6 and 3.75% from year 11 onwards.
Purchasers may re-mortgage with a
lender other than the Co-operative Bank provided they comply with
the terms of their initial mortgage agreement.
Owners will need to inform the equity
loan provider when they wish to sell and the provider will then
arrange the valuation.
An equity loan of up to 30% of the
market value to buy a new build property within specific schemes
brought forward by developers.
The equity loan will be co-funded
by Government and by the scheme developers on equal terms (ie
15% from the developer and 15% from Government where a 30% loan
Purchasers will be expected to raise
the remaining finance from a mortgage or savings.
The product can be used in conjunction
with a mortgage from any lender regulated by the Financial Services
There will be no fee charged for
the loan for the first five years, but a fee will be charged from
year 6 onwards.
All three products
The equity loan can be used in conjunction
with any deposit the purchaser may have.
The loan must be repaid when the
property is sold but can also be paid back earlier, as and when
the owner can do so. The loan can be redeemed earlier in instalments
if the purchaser wishes. Purchasers will also have to share any
increase in the property's value with the equity loan provider
or the Government/Developer. The amount which is repaid will be
based on the market value of the home at the date of repayment
Applicants should apply to HomeBuy
Agents, who will advise if applicants are eligible and recommend
an Independent Financial Advisor for advice on which product best
suits their circumstances.
There is flexibility within the HomeBuy framework
for providers to offer schemes that meet the needs of people with
long term disabilities. This includes the option for people to
purchase a suitable home on the open market, on a shared ownership
basis. Interested applicants need to contact the HomeBuy Agent
for the area where they live or if a Key Worker, the area where
they work, for further information.
New Build HomeBuy
Purchasers buy a minimum initial
share of 25% of a newly-built home. A housing provider holds the
remainder of the equity. The provider may charge rent of up to
3.0% on their equity. A lower target average for the rent has
been set at 2.75%. There is also a maximum limit on the annual
increase of rent charges of Retail Price Index (RPI) plus 0.5%.
Purchasers may buy further shares
in their home, in minimum 10% installments, when they can afford
to do soa process known as "staircasing".
Rent to HomeBuy
Rent to HomeBuy is a pilot scheme.
The Housing Corporation is inviting bids from providers wishing
to participate in the scheme during the remainder of 2008-09.
The scheme aims to help households
who find that they are unable to buy a share of a property through
the HomeBuy scheme at the present time because of current market
conditions (for example because they cannot obtain an affordable
mortgage without a deposit).
Rent to HomeBuy enables prospective
purchasers to rent a new build property on certain sites at an
intermediate rent (defined as 80% of market rent or less) for
a pre-specified period, with the first option to buy the property
on New Build HomeBuy terms at the end of (or during) this period.
Eligibility for the scheme is the
same as for the HomeBuy schemethat is households earning
less than £60,000 who could not afford to buy a suitable
property on the open market without assistance.
Properties will be let on Assured
Shorthold Tenancies for approximately two to three years.
When this period ends, the tenant
will undergo a further assessment by the HomeBuy Agent to determine
the size of share that they are able to afford and sustain under
New Build HomeBuy.
Tenants, who are assessed as not
in position to buy at the end of the period due to a change in
circumstances, will have their position reviewed by their landlord
but there is not guarantee that the tenancy will be renewed.
The first units were available in
This scheme provides new opportunities
for tenants who do not have the Right to Buy or Right to Acquire,
and those who do, but cannot afford outright purchase under the
statutory schemes, to buy a share in their rented home, at a discount.
Tenants of participating landlords
may purchase a minimum initial share of 25% of a home. The remainder
of the equity is retained by their landlord with rent charged
at maximum of 3% with a lower target of 2.75%. There is also a
maximum limit on the annual increase of rent charges of RPI plus
Buyers receive a discount on the
initial share purchased. This is equivalent to the Right to Acquire
discount (generally between £9,000 and £16,000depending
upon the local authority area in which the property is located),
pro-rata to the share purchased. Eg If your home is valued at
£200,000 and you live in a local authority area where the
maximum Right to Acquire discount is £16,000 and you buy
50%, you will pay £92,000 (ie £100,000 less the discount
Purchasers are entitled to a further
discount on any additional shares they buy, pro-rota to the share
purchased. Eg From the above example, if you subsequently buy
a further 25% share (taking your total share to 75%), you will
receive a further £4,000 discount (25% of £16,000).
Participation in the scheme is voluntary
for landlords but the Government is encouraging all landlords
to offer it.
Receipts generated by Social HomeBuy
sales will generally be used to provide more social lettings.
A small proportion may be spent on other housing related projects.
Tenants may buy 100% equity in their
home at discount if they can afford to do so.
Your landlord will carry out a financial
assessment to help decide what share you can afford to buy and
sustain, taking into account the available discount.
Some, but not all, properties which
do not qualify for the Right to Buy/Right to Acquire schemes may
be offered for sale under Social HomeBuy. There are some exemptions,
including properties in designated rural areas and groups of properties
for people with long term disabilities or special needs, which
are exempt from the Right to Acquire scheme and which landlords
will not be able to sell under Social HomeBuy.
TABLE SHOWING THE PURCHASE OF DEVELOPER STOCK
INCLUDING THE NATIONAL CLEARING HOUSE
||Total Grant||No of|
|E||Kings Lynn and West Norfolk
|EM||Hinckley and Bosworth
|EM||North West Leicestershire
|L||Barking and Dagenham
|NW||Crewe and Nantwich||£1,478,000
|SE||Basingstoke and Deane
|SE||Reigate and Banstead
|SE||The Medway Towns||£0
|SE||Vale of White Horse
|SE||Windsor and Maidenhead
|SW||Bath and North East Somerset
|SW||Weymouth and Portland
|WM||Malvern Hills District
|WM||Newcastle under Lyme
|WM||Nuneaton and Bedworth
|WM||Shrewsbury and Atcham
||No of homes||Total Grant
||No of homes||
TENANT SERVICES AUTHORITY (TSA) REGULATORY APPROACH TO
INSOLVENT HOUSING ASSOCIATIONS (HA)
This note sets out the Regulatory approach that the TSA would
adopt to a large HA becoming insolvent. This note is intended
for guidance only and does not represent the formal policy position
of the TSA. There has only been one case to date where the Regulator's
statutory Moratorium powers have been triggered and in that case
it resulted in the secure transfer of homes within the HA sector.
It is not possible to say with absolute certainty the exact outcome
if a rescue could not be agreed.
Large HAs usually have a number of business streams (both
social and non-social housing activities) each of which may be
attractive to a number of other HAs if they offer a strategic
fit with their existing business. If a very large HA was not viable
as a stand alone entity then the TSA would assess the appropriate
strategic and economic solution. This would include considering
whether the business as a whole could be transferred to another
HA and identifying who possible recipient HAs might be ie those
that have the financial and management capacity to absorb another
large HA whilst maintaining their own business strength and quality
of service delivery to tenants. If a whole transfer of the business
was not feasible, the TSA would seek transfer partners/buyers
for individual parts of the business.
For social housing tenants a transfer to another HA would
ensure that they continue with a landlord registered with the
TSA, rents would remain subject to the current restructuring framework
and quality of service delivery would be monitored through the
regulatory and inspection regime.
The TSA monitors the performance of all HAs and details of
our quarterly monitoring outcomes are summarised on our website.
If regulatory oversight and supervision was unable to prevent
an HA defaulting on its financial obligations then the HA would
be at risk of insolvency. At the point of default, before a HA
formally becomes insolvent, a Moratorium will have been triggered
and the TSA will then have a period of time to seek the agreement
of creditors to its proposals (eg transfer to another HA, break
up etc). During the Moratorium creditors are unable to commence
recovery or receivership processes. There are several changes
to the Moratorium under the 2008 Act which should aid the TSA
in implementing its proposals:
there is an additional step which would trigger
a moratorium; this would arise where the directors of a registered
provider took a decision to present a petition for winding up
a registered company or an I&P Society;
the duration of the moratorium has been extended
to 28 working days (previously 28 days);
the TSA may appoint an interim manager at any
time during a moratorium and may determine the terms and conditions
of such an appointment (new power);
a small amendment has been made to the requirement
to secure the approval of secured creditors to proposals made
by the regulator. This was previously 100% of secured creditors
but is now limited to such of the secured creditors as the TSA
is able to locate after making reasonable enquiries; and
where a manager is appointed to implement agreed
proposals in respect of a registered provider that is an I&P
Society that person now has an additional power to effect an amalgamation
of that Society with another I&P Society.
These additional provisions will not apply until the 2008
Act is `turned on' later this year. In the meantime the 1996 Act
provisions continue to apply including the 28 day Moratorium,
the requirement for the TSA to consult all secured creditors and,
where practical, tenants.
In the event that the TSA was unable to secure the agreement
of secured creditors to its proposals, then the insolvency process
would take over and an insolvency practitioner (probably a Liquidator)
would be appointed by the Insolvency Service. A secured lender(s)
would enforce their security and exercise their rights to appoint
a Receiver (a Receiver may be appointed to act on behalf of several
lenders). Following this there are two broad routes of action
that they could follow:
A. The lender(s) may manage the properties itself or appoint
a manager (which could be a HA or any other body including a for
profit management agent) to carry out day to day management. Existing
tenancies (both assured and assured shorthold) would continue
in force but the rent restructuring framework and other social
housing objectives eg Decent Homes would not apply to the lender.
Rents could only be increased in accordance with the terms of
the tenancy agreement. It is our view that over time they would
be likely to increase to housing benefit limits. The lender would
also, in all likelihood, dispose of void properties in order to
reduce outstanding debt. Alternatively, the lender could dispose
of the property portfolio to repay outstanding debt with any excess
proceeds being paid to the Liquidator.
B. The lender(s) may choose to dispose of the stock in whole
or in part to an existing social landlord. They would have the
opportunity prior to the sale to raise funds by selling all non
housing assets on the open market and all untenanted properties
on the open market (at their full for sale value).
The route taken by the lender(s) will depend on the individual
circumstances and market conditions at the time.
MEASURES TO ADDRESS SKILLS AND CAPACITY IN THE CONSTRUCTION
Short term measures include:
High profile reductions in employment within the
home building sector and potential reductions in the numbers of
apprentices in the sector. Future apprenticeship recruitment is
already under great pressure; and
CITB-ConstructionSkills downgraded the recruitment
targets to 5000 traditional apprenticeships and 1000 programme
Medium to long term measures include:
The challenging home building targets taken with
the probable reversal of the flow of migrant labour will potentially
lead to marked skill shortages in the medium to long term when
market conditions change; and
The forecast significant reduction in recruitment
together with reduced training volumes is now beginning to raise
strong concern among CITB Board members as when people leave during
times of reduced activity they tend not to return when the market
This position leads to a number of related issues that need
to be tackled to meet objectives:
maintaining employment during the downturn, which
will also help retain skills in the house building sector;
maintaining entries into the sector, in order
to refresh the pool of fully qualified people ready for the recovery
phaseat both craft and professional level; and
continuing work to enhance the capability of the
existing workforce, particularly to respond to the need to meet
We are responding to the short-term market conditions by
introducing measures to provide extra help for first time buyers,
homeowners facing difficulties, and keeping housing supply, especially
affordable housing supply, as high as possible. At the same time
our other immediate priority is to maintain capacity while creating
the right conditions for recovery and longer term growth.
The key to retaining skills in industry is to keep employment
levels up, and minimise redundancies, by keeping overall building
levels as high as possible and maintaining confidence.
CLG's biggest lever in this respect is to maintain investment
in and delivery of its own programmes for regeneration, new social
housing and decent homes. We aim to strike a balance by responding
to immediate challenges while continuing to work towards our longer
Government has already taken steps this year to tackle the
downturn in the housing market through measures announced last
year, and through PBR in November 2008. As an example, some 21%
of construction output is accounted for by housing repair and
maintenance, so action to support this part of the sector is important.
CLG's Decent Homes Programme shows that renovation of existing
properties provides widespread and continuing local employment
and can help maintain stability in a downturn. In the PBR we have
brought forward capital spend of £130 million in 2008-09
and £120 million in 2009-10 for Decent Homes. This will maintain
the planned Decent Homes programme in 2008-09 and bring forward
some planned improvements in 2009-10. Overall some 25,000 homes
will benefit from improvements with some now able to have work
completed a year earlier than planned. This could help to secure
around 1,500 jobs in the construction industry.
Similarly, bringing forward £175m for major repairs
to council housing will provide benefits to tenants by allowing
councils to bring forward planned replacement work on council
homes. In some cases this will avoid councils having to do piecemeal
repairs where they can now start on major replacement programmes.
This could help to secure around 1,000 jobs in the construction
The delivery of new social housing is vitally importantnot
only to meet need, but because of the contribution made by Government-supported
construction to the wider economy. But current market conditions
are making it hard to maintain delivery of these new homes, due
to reducing developer contributions (through Section 106s) and
falling proceeds from low cost home ownership sales (including
staircasing receipts from sales in previous years). The Government
believes that social housing money should be spent now to meet
these immediate economic and social needs, rather than waiting
up to three years for new social homes to be delivered. We have
therefore brought forward provision for around 2,000 new homes
for social rent with a further £150 million support for social
housing in 2009-10, bolstering the £400 million (for around
5,500 new homes) brought forward as part of September Housing
In May this year we set up a new national clearing house
where house builders can approach the Housing Corporation with
robust proposals to sell their unsold stock for affordable housing.
As at December, the Housing Corporation has allocated £160
million of the £200 million earmarked. This will deliver
almost 4,800 affordable homes.
We are also concerned to maintain momentum across the sector,
supporting social, environmental and economic objectives. But
our focus goes wider than homes. The commercial, office and property
sectors are crucial partners in shaping our future towns and cities.
To this end, the PBR announced bringing forward some £200
million to support regeneration programmes and growth projects
which are currently facing difficulties or might otherwise not
go ahead in the current market. The regional development agencies
and the HCA will be looking at priorities for this over the coming
weeks and month. This will underpin large numbers of jobs.
Finally, the new HCA will be combining the skills and resources
of English Partnership and the Housing Corporation in order to
have a "single conversation" with key partners in the
delivery of our housing and wider regeneration objectives.
In addition to maintaining employment in the sector the Government
is also seeking to preserve and enhance skills for construction
the "apprentice matching service" in
conjunction with ConstructionSkills, DIUS and the LSC, to help
retain apprentices with employers or place them with new ones
if redundancy is being considered. This went from concept to a
live service in September;
the establishment of a "taskforce" by
DIUS to consider what can be done to increase apprenticeship numbers;
the development of "National Skills Academies
for Construction" on larger building sites to ensure appropriate
the use of shared arrangements for apprenticeships
by employers or local councils to help minimise the economic risk
whilst maximising training opportunities; and
making Train to Gain more flexible for Small and
Medium sized businesses and targeting £350 million to help
them get through the tougher economic climate by building the
skills and expertise of their workers. Although not aimed specifically
at the construction and housebuilding industry, the new train
to gain package will help the construction industry due to the
large number of small businesses in the sector.
SUMMARY OF HOUSING MARKET ANNOUNCEMENTS
Government has already taken steps to tackle the downturn
in the housing market through measures announced this year.
In May we agreed that £200 million from the Housing
Corporation's budget could be used to purchase unsold stock for
affordable housing, and increased bidding and funding flexibility
for delivering affordable housing. It also included a £10
million package of measures, including additional advice, to support
home owners who may be facing difficulties with their mortgage.
In July we announced the set up of the new national clearing
house where house builders can approach the Housing Corporation
direct to negotiate the purchase of their unsold stock and removing
the £200 million limit on the funds made available to support
the purchase of new build homes for affordable housing, new proposals
for housing growth points, allocation of a £510 million funding
pot (Housing and Planning Delivery Grant) to reward councils who
are planning and identifying land for future development, and
new consumer information for families at risk from repossession.
Our September package of measures provided more support for
vulnerable householders to meet their mortgage payments and free
legal advice for those at risk of repossession. New schemes to
help first time buyers get their foot on the ladder, and a stamp
duty holiday. And we have looked again at our investment in social
housing and regeneration programmesto support those projects
which may be at risk. We have brought forward £400 million
to invest in new social housing over the next two years.
The Government also announced an additional £500 billion
bank rescue package in October to help restore confidence and
trust in the markets. This was followed by interest rates cuts
in November resulting in the gradually falling of Libor. All major
lenders (except Barclays and Alliance and Leicester) have passed
on the benefits of rate cut to their existing borrowers.
As part of Pre-Budget Report in November £775 million
of housing and regeneration investment is being brought forward
to help support the construction industry over the next two years
and preserve jobs and skills in the sector for the upturn including:
£250 million on Decent Homes programmes to
fund improvements and improve energy efficiency in 25,000 council
£150 million on social rented housing to
bring forward delivery of up to 2,000 social rented homes and
reduce the number of households in temporary accommodation.
£175 million for major repairs to council
£100 million to support key regeneration
and housing infrastructure projects.
In addition Government is working with the RDAs and regional
partners to consider the scope for bringing forward up to £100
million nationally to provide value for money in supporting regionally
and nationally important sustainable regeneration programmes.
We are also extending the Mortgage Rescue scheme to include cover
for second charge lending and the Support for Mortgage Interest
scheme for homeowners who lose their jobs.
On 3 December the Government announced the new Homeowner
Mortgage Support Scheme to help people who suffer a temporary
loss of income stay in their home. The scheme will enable households
that experience a significant and temporary loss of income as
a result of the economic downturn to defer a proportion of the
interest payments on their mortgage for up to two years. The scheme
will be rolled out in the New Year.
In addition Government has announced the following support
we are also extending the Mortgage Rescue scheme
to include cover for second charge lending and the Support for
Mortgage Interest scheme for homeowners who lose their jobs;
we have paid the year one allocations of the Housing
and Planning Delivery Grant at the beginning of November, totalling
over £100 million. This grant rewards local authorities for
improved delivery of housing and other planning outcomes;
we have announced on 10 December the 163 local
authorities with Growth Point or Growth Area status who will receive
£605 million of Growth Funding for 2009/10 and 2010/11. The
funding will allow the local authorities to provide infrastructure
to deliver 1.6 million new homes by 2016; and
we have announced on 15 December an additional
£100 million for the HomeBuy Direct scheme, bringing the
total investment to £400 million in order to help up to 18,000
first-time buyers. More than 130 developers have agreed to offer
the HomeBuy Direct scheme.
Et passim: question numbers relate to the uncorrected transcript
for the evidence session. Back