First-time Buyers
First-time buyers are to benefit from a £250 million cash injection to help them onto the property ladder. Around 10,000 people buying newly built homes are expected to receive 20% of the cost from the Government and the builder in low interest loans to put towards a deposit.
The loans will have to be for first-time buyers earning less than £60,000 jointly and who are looking to purchase a newly built home.
Planning Reforms
Reforms to the planning system aim to help kick start the housebuilding industry and tackle the chronic undersupply of new homes.
These measures include putting a presumption in favour of sustainable development at the heart of the planning system and introducing a 12 month guarantee for the processing of all planning applications.
Further, where developments have stalled due to planning obligations, councils are being encouraged to renegotiate these deals.
Green Investment Bank
The Green Investment Bank will start operating one year early in 2012 with an additional £2 billion in funding.
Funding of Services for Vulnerable People
Chancellor has not required local authorities to publish how they spend government cash earmarked for Supporting People schemes. The money is no longer ring-fenced and councils can spend it on whatever they want as it rolled into their general grant from central government.
Some councils have already announced cuts of more than 50% to their services for vulnerable people as a result.
Disability Living Allowance (DLA)
As previously announced at the introduction of the Welfare Reform Bill 2011, the Government will no longer remove the mobility component of DLA for people in residential care in October 2012.
Mobility provision for people in residential care will be reviewed as part of the wider reform of DLA to be introduced from 2013-14.
Support for Mortgage Interest Relief
Homeowners facing difficulties with their mortgage payments will be helped by extending for a further year temporary changes to the Support for Mortgage Interest (SMI) scheme.
The shortened 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013.
Enterprise Zones
The Chancellor announced the location of 10 new urban Enterprise Zones within the following Local Enterprise Partnership (LEP) areas:
In addition, London will have an Enterprise Zone and be able to choose its site - reflecting the Mayor of London's unique economic development responsibilities.
A competitive process will also be launched for interested LEPs to establish 10 more Enterprise Zones.
Local authorities will have a range of policy tools available including a provision that all business rates growth within the zone for a period of at least 25 years will be retained and shared by the local authorities in the LEP area to support their economic priorities.
VAT on Shared Services
The Government intends to consult on the UK implementation of the EU VAT exemption for shared services.
Under this exemption VAT-exempt bodies, including charitable housing associations, will be able to avoid paying VAT on the cost of back office and other services shared with other organisations.
Family Mosaic has published research findings that looks at the financial implications of increasing rents to 80% of the market rate. The study found that for 50 tenants it would increase their Housing Benefit bill by 151% - from £3,155 to £7,911.
The research report - Mirror, Signal, Manoeuvre - examines what the Government's new Affordable Rent model will mean to residents. Carried out by a leading independent policy analyst, the research is based on an evaluation of how an increase in rents to 80% and 60% of market rent would impact on 50 new tenants.
In its report, Family Mosaic welcomes the increase in rent flexibility, commenting that:
"t provides us with the freedom to determine our own rents.
"This new model might also result in a greater diversification within those who make up the social housing sector, which could be a good thing for housing".
The report calculates that at 80% of market rent, the move to the new rent would generate 92% extra rental income for the Association. At 60% of market rent, the new rent structure would increase income by 44%.
The research also found that at 80% of market rent, all the Associations properties had significant increases of rent. In seven inner London properties, these increases were over £200 a week. Outside London, increases were less than £50 per week.
At 60% of market rent, all properties in London would have increases in rent. In five inner London properties, these increases would be over £150 per week.
Family Mosaic Chief Execetive, Brendan Sarsfield said:
"We are determined to deliver more homes, but this look in the mirror tells us that the new model creates problems for our residents.
"The challenge now is - can we make higher rents work as a long-term solution during welfare reform and public spending constraints.
"Looking at the impact of the new model through the eyes of our residents will inform how we manoeuvre towards providing affordable social housing in the future."
New research published by the Home Builders Federation suggestss that local authorities across the country are losing out on millions of pounds in Central Government funding for failing to build the homes their areas need.
At a time when all local authorities have seen their funding cut and are making difficult budgetary decisions, the new figures show that they will in future be missing out on up to £27 million a year by scrapping previous plans for homes, or not building enough to meet the needs of their communities
The New Homes Bonus is a cornerstone of the new 'localism' based planning system. The Government hopes it will incentivise local authorities - who have already seen their general funding cut - to facilitate housing construction, enabling the Coalition to meet its objective of building more homes and alleviating the country's growing housing crisis.
Local aAuthorities across the country have recently learnt for the first time how much they will receive from Central Government this year for building homes. Some will gain over £4 million in New Homes Bonus whilst others will receive nothing.
The Government's own household formation projections show we should be building 232,000 homes a year to meet the country's need. Yet figures released recently show only just over 100,000 were built in 2010 - the lowest in any peacetime year since 1923.
Leeds City Council is revealed as the biggest potential loser. In recent months, and since the Government outlined the new planning system, it has scrapped plans for over 30,000 new homes. Continuing to build at its current rate of 1,200 new homes a year - despite its population requiring over 5,000 - could mean it loses out on over £27 million a year in Bonus payments after 6 years.
This money will instead go to other local authorities, as the New Homes Bonus 'top slicing' of central Government grant is implemented.
The Northern Ireland Executive has agreed a budget which includes cuts of £70 million to social development.
Executive members voted to allocate an extra £450 million to education and health, but the Department for Social Development, which funds social housing in the province, received a £70 million cut.
It will take a while before the implications can be assessed for grants for housing associations or the Housing Executive, which manages 90,000 homes across Northern Ireland.
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GB Social Housing (GBSH) announced that is in talks with a number of mid-sized associations about plans to issue its first £150 million bond this summer.
GBSH, which is owned by investment advisor Cutwater Asset Management, will offer landlords more flexibility to change conditions midway through a bond than rival vehicles, including The Housing Finance Corporation (THFC). However, it will charge higher fees.
Unlike the THFC, GBSH will require associations to meet gearing conditions - which measure debt to equity - and interest cover - being profits divided by interest payments.
This will mean that the initial level of asset cover required for associations (which compares loans to assets) would be as low as 105% - compared with 150% for THFC.
Associations at risk of breaching their gearing and interest cover limits will be able to increase them. This will, however, increase the required asset cover.
Associations can also choose to dispense with gearing and interest cover covenants by moving to a system based on net income and asset cover of 140 to 150%, which is similar to THFC.
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Home Group became the first association to publish data on all its spending over £500. This responds to the Government's call for social landlords to become more transparent.
The Association manages 52,000 homes with an annual turnover in excess of £310 million.
The decision to publish spending figures has caused some concern in the sector that responding to the Government's call for increased transparency might damage housing associations' status as private bodies - and push £40 billion of private debt onto the public sector balance sheet.
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