Government will buy homes developers can’t sell in £2bn housebuilding drive
The government will use a new £2bn housebuilding fund to step in and buy homes that developers cannot sell in a drive to speed up housing delivery and reduce construction risk.
The accelerated construction fund, announced at this week’s Conservative Party conference, will be used to guarantee housing developments, with the government effectively using its balance sheet to underwrite the risk developers take.
The move is aimed at addressing developer concerns that they cannot build homes faster than they can sell them. Under the new scheme, if the government is required to buy homes, the HCA will directly sell them either on the open market, to private rented sector investors or registered social landlords.
This week communities secretary Sajid Javid said the £2bn fund, which will be paid for through additional government borrowing, would only apply to schemes on public land and would back the construction of an extra 15,000 homes by 2020.
Lister revealed that the government would probably impose quotas on schemes backed by the fund to guarantee that a proportion was built off-site.
The price at which homes were guaranteed would be set as part of the bidding process, Lister added, and the level would be something the government took into account in choosing schemes to back.
Lister stressed that the fund would only back projects that could be built out quickly and that the HCA would consider allowing developers to defer payments for the land in order to speed up the process.
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