The Government announced details of the regional allocation of £5.5 billion for investment in housing by councils, housing associations, and other providers of social housing over the next two years.
Regional Housing Boards were established, in 2003, to advise Ministers on how resources and funds should be allocated in each region to meet strategic housing priorities, as set out in Regional Housing Strategies. The Strategies are developed in close consultation with other regional bodies and key stakeholders in the region, to ensure effective integration with other strategies and investment programmes. The regional housing resources are for:
With the help of the additional resources made available in the spending review, the Government expects to see 75,000 new social rented homes over the next three years. This represents an increase of 50% over current levels by 2007/08.
The allocations are shown below for each region for the years 2006/07 and 2007/08 (£million):
The Scottish Executive's affordable housing programme for Scotland - managed by Communities Scotland - was expanded with a funding boost to build new homes for rent and ownership, in both urban and rural areas.
The 2005/06 programme, which was announced by Communities Minister, Malcolm Chisholm, will provide over 5,200 homes for rent for people in need, and over 1,100 will be for low-cost home ownership. This includes Homestake, the new shared equity scheme to help first-time buyers.
This is the first year of a three-year programme, which will invest £1.2 billion to build 21,500 new or improved affordable homes in Scotland, including around 5,000 for low-cost home ownership and 16,500 for rent.
The Government announced details of a £65 million allocation for tackling housing abandonment and low demand outside the nine Pathfinder areas.
The three Northern regions will share the grant, aimed at widening help for communities suffering the severe problems caused by weak and failing housing markets:
Within these regions, the priority areas expected to receive the majority of the funding are West Cumbria in the North West, Tees Valley in the North East, and West Yorkshire in Yorkshire and Humber.
The Government confirmed it is looking at ways in which the resources of the private sector can be used to bolster the ODPM's low cost homeownership schemes. It is working with the Council of Mortgage Lenders, banks and building societies, as part of a wider review of low cost homeownership provision.
Discussions have made considerable progress, and general agreement has been reached on how any scheme would be implemented, including:
Once agreement on the details of the scheme is reached, the ODPM is proposing to modify a proportion of its low cost home ownership programme, to test it. If successful, the modified scheme could potentially be rolled out across the whole programme.
Housing Minister, Yvette Cooper, announced that the Government is to consult on proposals to help council tenants wishing to use non-standard mortgage products to purchase their homes but cannot do so under current Right to Buy rules.
Three kinds of non-standard mortgage product are currently available, all of which comply with Islamic (Sharia) law:
Under current Right to Buy rules, tenants cannot use non-standard mortgages. The Government is, therefore, consulting on proposals which would enable councils to sell homes to tenants who qualify for the Right to Buy and would prefer to use non-standard mortgages.
Tenants choosing this route for Right to Buy would get the same discount and pay the same price for their home as they would if they had used a traditional means of finance. To make sure that its proposals tackle all the issues, including consumer protection, the Government is consulting the industry and the faith community, asking for comments within three months.
If the new rules proposed in the consultation paper are implemented, they will be reviewed 18 months after coming into effect, to check how they are working, whether the marketplace has changed in that time, and whether further changes are needed.
The Government intends to consult separately on options for using non-standard mortgage products with low-cost home ownership schemes, including the new HomeBuy – introduced in January 2005.