The Conservative government announced – with much fanfare – that it will release £5bn to boost housebuilding. Some £3bn of this would go through the new Home Building Fund, while £2bn has been allocated through the Accelerated Construction Fund.
All of this is to be managed by the Homes and Communities Agency. Its chief executive, Mark Hodgkinson, said the HCA was determined to speed up delivery and promote new approaches to housebuilding. “The new Home Building Fund offers the industry flexible development and infrastructure finance and we are open for business right away,” he said.
But not all of this is new money, nor is all of it guaranteed.
In fact, £2bn will be recycled from existing funds, while
the £2bn for the Accelerated Construction Fund will be
raised through new borrowing. That cash could be used for a range of different incentives, not least the underwriting of schemes of units that do not sell to encourage their faster development.
But the intention is that some of this money will not have to be spent. Last week, at the Housing Market Intelligence Conference, HCA chair Sir Edward Lister said that the HCA would ideally never spend a penny of that money, and instead use it only where there is market failure.
The conditions imposed by the HCA on accessing the money could also be problematic – as funding has been in the past – though the rates released in the guidance are competitive.
The challenge will be making sure the cash gets spent.
