Shapps pledges £1billion for New Homes Bonus

Housing Minister Grant Shapps today pledged cash for communities who allow new homes to be built in their area.

Almost £1 billion Government funding has been set aside for councils that welcome new housing development, which they will be able to spend to benefit their local community.

In proposals published for consultation, the Minister has announced that the Government will match the Council Tax raised from new homes for the first six years through the New Homes Bonus. Councils and communities will work together to decide how to spend the extra funding - whether council tax discounts for local residents, boosting frontline services like rubbish collection or providing local facilities such as swimming pools and leisure centres.

Shapps said: “We are ending the system where the Government can tell communities what and where to build - that top-down approach slowed housebuilding to a trickle, so we need to take action now to get the country building again. That’s why we’ve set aside almost £1 billion so councils who build more homes start benefiting immediately from the extra cash, which they can spend on improving the local area.

“For too long communities have fought against development because they can’t see how it does anything to improve their lives. I’m determined to change this. The New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs.

“Councillors will now be able to lead a mature debate about the benefits of development. And rather than being punished for not meeting targets, local communities will now have a reason to say yes to new homes, because they will benefit from better local services, or perhaps the redevelopment of their town centre in return for backing new housing.”

Executive chairman of the Home Builders Federation, Stewart Baseley said: “The country is facing an acute housing crisis and it is imperative we have a planning system that delivers sufficient land for the homes we need. The New Homes Bonus is an essential part of the new incentive based structure and we welcome the commitment to a simple, easy to understand system.”

Councils will benefit from a higher level of funding for encouraging new affordable homes to be built in the local area, with Council Tax matched and then supplemented by £350 per home each year for six years. Today’s announcement follows the Government’s commitment to invest £4.5billion in affordable housing over the next four years, which will deliver up to 155,000 new affordable homes.

The Chartered Institute of Housing (CIH) has welcomed the consultation. Its chief executive Sarah Webb said: “The New Homes Bonus is a positive attempt to encourage and reward local communities who support sustainable housing development. The incentives for both market and affordable housing are welcome and over time could make a helpful contribution to housing growth. The potential of the measures to bring empty homes and conversions in to use are particularly welcome.

“However, we are concerned about how the bonus will work with regeneration schemes and in areas where housing market renewal is underway. Local people who are working hard to make their communities better places to live shouldn't miss out if they have had to demolish homes no longer fit for habitation.”

Liz Peace, chief executive of the British Property Federation, said: “Existing local communities need to see they are getting something back from additional housing development and so the BPF very much welcomes today’s announcement. The New Homes Bonus sends a clear signal that those communities accepting desperately-needed housing will be rewarded while those that do not have that choice, but will lose out. Subject to getting the detail bottomed-out we are delighted the Government is also considering extending the New Homes Bonus to long-term empty property. Returning empty property to use is very resource-intensive for local authorities and this additional source of funding comes just at the right time with redevelopment often more viable than new build.”