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£10bn in housing guarantees and £280m FirstBuy extension announced

Communities secretary Eric Pickles has announced a series of policies to support the housing sector, including extending FirstBuy to March 2014 and providing a £10 billion debt guarantee for private rented and affordable housing.

The government will also provide £200 million of new funding to support institutional investment in high-quality rented homes.

Expressions of interest in the guarantees were welcomed from Friday.

Mr Pickles added that the government would invest £300m in measures to support 15,000 new affordable homes and to bring 5,000 empty homes into use.

“This government wants to get the economy growing, to remove unnecessary red tape, to support locally-led sustainable development,” he said.

The announcement comes after it was announced this morning that planning requirements on some home improvements would be temporarily relaxed.

The much-lauded FirstBuy scheme will receive a boost of £280m, which the government says will help 16,500 first-time buyers.

Mr Pickles also pledged that the government would “accelerate the release of surplus public land” and offices through a targeted programme, in an attempt to “unlock locally-supported live sites”.

He also said the government would introduce “a series of  practical measures to help speed up planning decisions and appeals on major infrastructure”.

These included allowing developers to extend the duration of existing permissions, and making it easier to appeal unrealistic obligations applied by section 106, which imposes affordable housing quotas.

DLA Piper partner and Manchester head of planning Christopher Bowes said: “The proposals look like great news for developers, but it will be important that the Planning Inspectorate is given the resources to handle the ensuing rush of planning appeals.

“It will be no help to anyone if the development log-jam simply moves from local authorities to the Planning Inspectorate.

“There is also a clear conflict between the government’s support for ‘locally led’ development and decisions that will now be made by the Planning Inspectorate under the fast-track appeal route, rather than local politicians.

“These reforms will be hugely controversial in some areas.”

He continued: “Permitted development rights to allow commercial premises to be converted to residential purposes could create tensions as traditional commercial and industrial areas are eroded by residential incomers. 

“Will existing commercial occupiers be driven away as bad neighbours in the future?

“Overall the measures look set to help the supply side, but the big question is whether the demand will come from housebuyers if the red tape is removed from the housebuilders.”

Mr Pickles said his aim was to reform a “top-down planning system that built nothing but resentment”.

There will also be a “fast-track” route for certain applications through the Planning Inspectorate, which will be able to decide applications if a local authority is consistently slow or performs poorly.

An industry-led group will be convened by the government to overcome offsite home construction barriers.

The Local Government Association earlier said that there is a backlog of 400,000 homes which have planning permission but have not yet been built.

It says demand in the economy is the issue, with developers no longer confident they can sell homes.

There was also a pledge to protect green belt land “in line with our commitment in the coalition agreement”.

CBI director-general John Cridland said: “We have long said that unfreezing the housing market will be a major game-changer in the drive for economic growth.

“The housing and planning announcements today will provide a much-needed tonic for the construction sector, getting diggers on site and people into work. It will make a difference to households across the country.

“We welcome the government’s plans to extend the FirstBuy scheme, and we now want the same focus on ensuring the NewBuy scheme reaches its full potential in bridging the deposit gap for first-time buyers.”

He added that although the guarantees were welcome progress, firms needed to see the legislation in place as soon as possible.

Homes and Communities Agency chief executive Pat Ritchie said: “Government has shown its commitment to housing and development as a major route to driving economic growth.

“I welcome the confidence ministers have shown in the HCA’s ability to deliver their key initiatives, supported by new investment.”

Construction union UCATT, however, expressed scepticism, with general secretary Steve Murhpy commenting: “The move to reduce the building of social homes for rent is madness.

“This sector has seen the greatest fall in output in recent months and this is directly a result of government policies.

“There are five million people on housing waiting lists; we should be examining every possible measure to increase social housebuilding, not cutting it.”

Federation of Master Builders chief executive Brian Berry said: “The need for more homes is now a top priority given that we [are] only building half the number to meet current demand.

“The announcement today for £300m to provide 15,000 affordable homes and to bring 5,000 homes back into use is a useful start.

“However, given the scale of the housing crisis with nearly 5m people on social housing waiting lists, it would have been helpful if the government had turned its attention to the regulatory burden placed on small housebuilders.

“Scaling back developer contributions to local authorities would help, as would not adding extra development costs through changes to the new building regulations.”

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