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Government Housing Initiatives


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Summary: Recent months have seen a number of new housing initiatives announced by Government such as the Home Building Fund, the Housing Infrastructure Fund, the Starter Homes Fund, Garden Villages and the Accelerate Construction Programme. The key points of each of these initiatives are set out in this article.

Late 2016 saw a number of new Government housing initiatives and 2017 has continued this trend, with the announcement of the selection of Local Authorities for the Starter Homes initiative; the selection of fourteen garden villages and three additional garden towns; and the issue of a prospectus to Local Authorities for the Accelerated Construction Programme.  A round up of the key points of these initiatives is set out below.

Home Building Fund

This Fund was announced in October 2016 and comprises a £3 billion recoverable investment/loans fund managed by Homes and Communities Agency (HCA), created from a number of the previous HCA funding programmes together with some additional funding.  Instead of funding programmes being under specific purpose heads (eg Large Sites Infrastructure Fund or Build to Rent Fund) as previously, the Home Building Fund will be divided into two streams:

  • short term development finance and
  • long term infrastructure finance.

A few specific purpose related HCA funding programmes will remain.  These are:

  • the Shared Ownership and Affordable Homes Programme 2016-2021

The government is making available £4.7 billion of capital grant (increased by additional £1.4bn in Autumn Statement) between 2016 and 2021 to deliver affordable home ownership products particularly shared ownership. Separately the Greater London Authority (GLA) has secured £3.15bn of affordable housing funding to 2021.

  • the Estate Regeneration Fund

The £140 million Estate Regeneration Fund is designed to accelerate and improve estate regeneration schemes through recoverable investments.

Whilst the £3.5 billion Affordable Housing Guarantees Programme has come to an end, the £3.5bn PRS guarantees programme continues.

Housing Infrastructure Fund

This is a £2.3 billion new fund to 2020/21 announced in the Autumn Statement as part of the National Productivity Investment Fund. Local Authorities will be able to bid on a competitive basis for funding for infrastructure such as new roads or utility connections (such as water, energy and internet) to unlock housing sites in high demand areas. The Government says this Fund will support the delivery of up to 100,000 new homes. Further information on how this Fund will be allocated to Local Authorities is awaited. However, it’s assumed that this Fund will be managed by the HCA.

Starter Homes Fund

The first wave of thirty Local Authority partnerships were announced on 2 January 2017. These Authorities were chosen on the basis of their potential for early delivery. The partnerships will have access to the Government’s £1.2 billion Starter Homes Land Fund which supports the development of Starter Homes on sites across England. These Starter Homes will be built on brownfield sites exclusively for first-time buyers between 23 and 40 years old at a discount of at least 20% below market value. This announcement follows the publication of the Fund’s Prospectus in the Budget in March 2016. The Prospectus envisages the establishment of a number of partnerships between the HCA and individual Local Authorities which would use the Fund to prepare a package of sites in their area capable of delivering Starter Home developments by 2020. Specifically, the HCA is to:

  • give targeted support and expertise, for instance by providing assistance with finding suitable developers for sites, professional/technical advice or procurement matters;
  • provide equity investment to remediate and de-risk sites in Local Authority ownership for Starter Homes developments; and
  • acquire further suitable sites outside local authority ownership for the early delivery of Starter Home developments in support of the wider aims of their local area.

Although the partnerships have been announced, the method of investment is not yet clear.

Garden Villages

The first wave of 14 Garden Villages and three additional Garden Towns were announced on 2 January 2017. It is not clear what will be on offer to the Local Authorities/communities sponsoring these garden settlements beyond the £6 million technical fund to support the delivery of these new projects.

The following was offered as part of the support package:

  • brokerage – the Government helping Local Authorities overcome barriers to delivery and broker solutions to unblock any issues that arise
  • access to Government housing funding streams
  • financial flexibilities – this has not yet been defined  
  • planning freedoms in exchange for guaranteed housing delivery
  • supporting Delivery Vehicles - the Government are willing to support Local Authorities to consider what the most appropriate delivery arrangements will be to ensure that the main partners are able to take key decisions effectively.

Accelerated Construction Programme

A prospectus was issued to Local Authorities on 2 January 2017. This Programme will provide a tailored package of support to Local Authorities who would like to develop out surplus land holdings at pace. The aim is to start 15,000 homes on central and local surplus public sector land by 2020 through  £1.7 billion of investment.

The programme is designed to support housing market diversification by supporting SME builders and tackle the construction skills gap. Potential new approaches are being developed with the Government in some models underpinning construction by agreeing to acquire unsold stock. Government support is likely to range from the HCA carrying out Accelerated Construction on local authority land to the HCA offering direct support and expertise. The HCA could also help to broker conversations between Local

Authorities in geographical areas where there are parcels of land that could work as a package. There is also the offer of funding streams which, subject to eligibility, could be open to be used as secure priority access.


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