Deputy prime minister Nick Clegg is backing plans for garden city mega-projects and a £225m boost for stalled housing developments.
Tax increment financing should be used to reinvigorate frozen housing programmes, clearing bureaucracy and “de-risking” locally led housing schemes of between 4,000 and 9,500 houses, Mr Clegg is expected to tell the National House-Building Council later today.
He will say the scheme aims to help “build our way out” of the housing crisis, and expects to unlock 48,600 new homes that have fallen prey to problems with cashflows, bureaucracy, licensing or a lack of infrastructure investment.
Taxpayers are expected to receive the money back when projects are complete.
In what Mr Clegg will say harks back to Britain’s “proud tradition of building new places”, more details will soon be released regarding an opportunity for developers to bid for support for large projects, such as garden cities and suburbs, which could generate up to 25,000 homes.
The government’s Housing Strategy announced a competition to promote large-scale, sustainable, locally led projects.
Mr Clegg will reveal that the government plans to “make the best offers to the most ambitious proposals – so not just 5,000 new homes, but 15,000, 25,000”.
“We need to go back to our roots”, Mr Clegg will say, lamenting a housing shortage of 100,000 homes per year.
“The credit crunch has certainly exacerbated the problem – with mortgages and deposits harder to come by. But this housing crisis has been a long time in the making: we’ve been under-building for decades.”
He will also back the use of tax icrement financing – where councils are allowed to borrow against future business rate incomes – to support the “garden cities and suburbs for the 21st century”.
“We can cram ever more people into existing settlements, concreting over gardens and parks – or we can build places people want to live,” Mr Clegg will say.
“This is the moment to revive the ambition of those who came before us, in order to create a better future for those who will follow us. In keeping with our great British traditions: it’s time to think big.”
“Until now, the political establishment has been overwhelmed by the scale of the challenge, tinkering round the edges and responding with timidity, where only ambition will do.”
NHBC chief executive Mike Quinton was among the industry leaders who welcomed the announcement: “Our figures show there is still an urgent need for new homes, with little increase in the number of homes being built this year.
“The plan to create new garden cities and large-scale housing is bold, but at its heart lies a commitment to increase the number of homes being built, and we look forward to hearing more.”
NHBC figures released today show that 26,440 new homes were registered with the body in the three months to October, down slightly from 26,509 during the same period in 2011.
However, 9,680 of these were registered during October, up almost 2,000 on the same month in the previous year.
Mr Quentin said government stimulus measures “anecdotally seem to be having a positive effect”, and called for the level of “dedicated support” to be sustained with a “long-term commitment to housing” in the autumn statement.
Home Builders Federation executive chairman Stewart Baseley said: “We welcome the deputy prime minister’s recognition of the scale of the housing problem and his commitment to addressing it.
“He is right that long-term planning will be essential to ensure a future housing supply that tackles the current backlog of unmet demand as well as future requirements.
“But long-term planning needs to go hand in hand with making every effort to ensure that existing policies are implemented effectively in the short term to spark housebuilding so we can address the immediate, and acute shortfall, and stimulate economic activity.
“Sustained action is needed to address the constraints of a lack of mortgage supply, blockages in the planning system and the regulatory issues affecting development viability so we can deliver more new homes now.”
Chief executive of the National Housing Federation David Orr welcomed the news, but also warned that “an ambitious programme shouldn’t come at the expense of other shorter-term measures which could deliver growth quicker”.
He added: “The housing market is at the point of no return, with rising house prices, rising rents and millions of families struggling to afford their home. For decades we have only been building about half the number of homes we need.
“Housing has a crucial role to play in the country’s economic recovery. Every £1 spent on housing puts £3 into the wider economy, and every new home built creates 1.5 jobs in construction and up to four times that number in the wider supply chain, helping people back into work.”