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Affordable homes shortage: Government to reveal plans Affordable homes shortage: Government reveals plans
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Plans to allow first-time buyers of new homes to borrow up to 95% of their value, with the government underwriting part of the risk, are to be unveiled. Plans to allow first-time buyers of new homes to borrow up to 95% of their value, with the government underwriting part of the risk, have been unveiled.
They are part of a scheme to deal with an acute shortage of affordable homes, set to be revealed by David Cameron. They are part of a scheme to deal with an acute shortage of affordable homes and people unable to get mortgages.
It includes a £400m fund which will help to kick-start schemes which are ready but lack necessary finance. It includes a £400m fund which aims to kick-start schemes in England which are ready but lack necessary finance.
This initiative, for England only, will begin in July and aims to facilitate 16,000 new homes and up to 32,000 jobs. Ministers said the plans would "unstick" the market but Labour said they were "rather small beer".
The government call the plans "radical" and a "step change" in their approach. However, Labour say ministers have failed to deliver on housing.
'Shovel-ready projects''Shovel-ready projects'
Building more homes has been earmarked as one of the government's economic priorities.Building more homes has been earmarked as one of the government's economic priorities.
The number of new homes being built is at the lowest level since World War II, rents and prices remain high and mortgage lending is restricted, the BBC's home editor Mark Easton says.The number of new homes being built is at the lowest level since World War II, rents and prices remain high and mortgage lending is restricted, the BBC's home editor Mark Easton says.
Just 121,200 new homes were made available in 2010-11, 6% fewer than the previous year.Just 121,200 new homes were made available in 2010-11, 6% fewer than the previous year.
Although the decline was not as sharp as in the previous year when the number of new builds and conversions fell by 23%, Labour say the government has failed to get a grip on the problem in its first year in power, and the situation has got worse in some parts of the country.Although the decline was not as sharp as in the previous year when the number of new builds and conversions fell by 23%, Labour say the government has failed to get a grip on the problem in its first year in power, and the situation has got worse in some parts of the country.
In an attempt to stop this decline, ministers are to intervene to support "shovel-ready" building projects that have been delayed by funding problems.In an attempt to stop this decline, ministers are to intervene to support "shovel-ready" building projects that have been delayed by funding problems.
A "Get Britain Building Fund" will see developers compete for funding to take forward projects which meet the right criteria, among them a commitment to affordable homes.A "Get Britain Building Fund" will see developers compete for funding to take forward projects which meet the right criteria, among them a commitment to affordable homes.
'Deposit blockage' This initiative will begin in July and aims to facilitate 16,000 new homes and up to 32,000 jobs.
It is hoped that about 450,000 mainly affordable homes will be built by 2015, many of them on publicly-owned brownfield sites. It is hoped that about 450,000 mainly affordable homes will be built by 2015, many of them on publicly-owned brownfield sites, although the government is not setting any specific targets.
Empty properties will be brought back into residential use and new providers will be encouraged to enter the social housing market, say ministers.Empty properties will be brought back into residential use and new providers will be encouraged to enter the social housing market, say ministers.
To help potential buyers, tenants of social housing are likely to get the right to buy their home - a hallmark of the Thatcher government in the 1980s - for as little as half the market price and the money will then be used to build more affordable housing.To help potential buyers, tenants of social housing are likely to get the right to buy their home - a hallmark of the Thatcher government in the 1980s - for as little as half the market price and the money will then be used to build more affordable housing.
It is also expected that a mortgage indemnity scheme will be offered meaning first-time buyers can borrow up to 95% of the value of a home - with government underwriting part of the risk. For every house sold off this way, the government is pledging to build a new one.
A mortgage indemnity scheme will be introduced so that first-time buyers can borrow up to 95% of the value of new build homes - with government underwriting part of the risk.
Housing minister Grant Shapps told BBC Breakfast the government was not seeking to "pump up" the housing market but to help people get on the property ladder in a "responsible" way.Housing minister Grant Shapps told BBC Breakfast the government was not seeking to "pump up" the housing market but to help people get on the property ladder in a "responsible" way.
"What we want to do is to make it easier for first-time buyers who say the biggest problem is the amount of deposit we have to get together," he said. "This is the biggest blockage.""What we want to do is to make it easier for first-time buyers who say the biggest problem is the amount of deposit we have to get together," he said. "This is the biggest blockage."
'Lack of confidence'
In the foreword to the government's new strategy, David Cameron and his deputy Nick Clegg say the UK is facing a situation where "lenders won't lend, so builders can't build and buyers can't buy".In the foreword to the government's new strategy, David Cameron and his deputy Nick Clegg say the UK is facing a situation where "lenders won't lend, so builders can't build and buyers can't buy".
"That lack of confidence is visible in derelict building sites and endless For Sale signs," they write, adding that this is doing huge damage to the economy and society. "That lack of confidence is visible in derelict building sites and endless For Sale signs," they write, adding that this is doing damage to the economy and society.
Ministers will argue their overall strategy marks a "step change" in their approach, but the BBC's local government correspondent Mike Sergeant said there would be questions about whether this was simply bringing together announcements already made, or was more substantial. The House Builders Federation said the lack of mortgage availability since the 2008 banking crisis had been "the biggest constraint" on new homes and the indemnity scheme would help to address this.
CBI director general John Cridland said the UK needed "a bold package to get the housing market going again" with support for first-time buyers to help them "bridge the gap". "In recent years, many people have been unable to realise their dreams of buying a home because of the huge deposits required by lenders," its executive chairman Stewart Baseley said.
Labour said the government's "mismanagement" of the economy was holding back housebuilding. "This scheme will be allow people to buy their new home on realistic terms and help, in particular, hard-pressed first time buyers."
"With millions in need of a decent home at a price they can afford, the country is gripped by a growing housing crisis," shadow housing minister Jack Dromey said. But Labour said the government's "mismanagement" of the economy was holding back housebuilding.
"Despite 127 government announcements, more than one a week since the coalition took power, their own figures show a 6% fall in new homes and a 10% increase in homelessness." "I am afraid it is rather small beer in its scale," said chancellor Ed Balls said. "It is a £400m boost, but George Osborne last year announced a £4bn cut in housing spending."
The opposition have urged ministers to levy a £2bn tax on bank bonuses to pay for 25,000 new homes and 100,000 new construction jobs for young people, as part of their five-point plan for boosting growth.The opposition have urged ministers to levy a £2bn tax on bank bonuses to pay for 25,000 new homes and 100,000 new construction jobs for young people, as part of their five-point plan for boosting growth.
"I think most people would say that with bank bonuses still very high repeating that tax for £2bn and using it in that way would be a much better way to spend the money and a good boost to jobs and housing."