Budget 2020: £12bn affordable homes programme, £1bn Building Safety Fund and PWLB rate cut
The chancellor has announced a £12bn affordable homes programme, a reduction in the interest rate on council borrowing for social housing and a new £1bn Building Safety Fund, as part of the 2020 Budget.
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Presenting his first Budget speech in parliament after becoming chancellor a month ago, Rishi Sunak said that the government was committed to extending the affordable homes programme with a “new multi-year settlement of £12bn”.
This, he said, represented the “largest investment into affordable housing in a decade”.
Red Book documents state that the government will invest a further £9.5bn in the programme, which “in total will allocate £12.2bn of grant funding from 2021-22 to support the creation of affordable homes across England”.
It adds that this should bring in a further £38bn in public and private investment, and that the programme will help “more people into homeownership and help those most at risk of homelessness”.
Mr Sunak also appeared to reverse the recent hike in the interest rate for the Public Works Loan Board (PWLB), in cases where councils are using the funding for social housing.
He said: “To support local authorities to invest in their communities, I’m cutting interest rates on lending for social housing by one percentage point, making available more than £1bn of discounted loans for local infrastructure.”
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The chancellor also announced a consultation on the future of the PWLB. Documents published by the government today show that the focus of the consultation will be to address the move by a “minority of councils” to use the borrowing to invest in commercial property for rental income.
It said: “To address this, the government is consulting on revising the terms of PWLB lending to ensure that local authorities continue to invest in housing, infrastructure and public services.”
In addition, Mr Sunak revealed a new £1bn Building Safety Fund to remove unsafe cladding, which he said would go beyond the removal of aluminium composite material to support other safety works.
Other housing announcements included a new £400m fund designed to encourage building on brownfield sites and confirmation of £1.1bn of allocations from the Housing Infrastructure Fund, which Mr Sunak said would support the construction of nearly 70,000 homes in areas of high demand.
The government is committing £650m in funding “to help rough sleepers move into permanent accommodation”, he said, stating that the money would fund up to 6,000 new places for people to live in and enable a “step change” in support services.
Mr Sunak said that housing secretary Robert Jenrick would tomorrow set out “comprehensive reforms” to the planning system to bring it “into the 21st century”.
Budget 2020, key housing announcements
- £1bn Building Safety Fund to remove unsafe cladding, beyond ACM
- £12.2bn Affordable Homes Programme
- £650m fund to help rough sleepers
- 1% interest rate cut on lending for social housing via PWLB
- £400m building fund for brownfield development
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