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Housing sector boosted by Sajid Javid's announcement of £5bn funding package at Conservative Party conference

The government has announced a £5bn funding package targeted at SME housebuilders and accelerating construction of new homes on brownfield land.

A £3bn Home Builders Fund and a £2bn ‘Accelerated Construction’ scheme was announced by communities secretary Sajid Javid earlier today at the Conservative Party conference in a bid to tackle the country’s housing crisis.

The Home Builders Fund will target small-scale developers to help overcome issues around access to finance.

It is expected to help SME housebuilders create an extra 25,500 homes before 2020 with a long-term goal of building 225,000 homes.

In addition to the Home Builders Fund, the £2bn Accelerated Construction fund is aimed at speeding the delivery of new homes on publicly owned brownfield land.

Communities secretary Mr Javid said the government wanted to talk to contractors about working in collaboration with them, and would look at modern methods of construction.

He said: ”We will take government-owned land and partner with contractors and investors to speed up housebuilding.

“We will create new supply chains using offsite construction. And we will encourage new models of building to make houses that people want, more cheaply and at pace. These measures will allow us to get started on 15,000 homes by 2020.” 

Mark Farmer, CEO of Cast, said: “Site availability and funding remain critical issues for the house building industry, especially for SME developers, but a far greater challenge lies in the construction industry’s capacity - the ability to actually build the homes required.

“The construction workforce is ageing and shrinking, and given the emphasis on immigration controls in May’s opening speech and notwithstanding Sajid Javid’s recent positive statement that he will make sure the ‘building sector has got whatever it needs’, it seems more unlikely we will be able to guarantee the flow of migrant labour from eastern Europe and elsewhere.

“The solution here, as outlined in my forthcoming review, is to invest in modernising the industry, supporting new methods of delivery like modular, and reforming the training process to make it more effective. If you do not do these things alongside helping with land availability, planning and funding for housebuilding, you will just increase construction costs which will be counter-productive and in itself will inhibit delivery.”

Federation of Master Builders chief executive Brian Berry said: “One in two local housebuilders cite difficulty accessing finance as a major barrier to their ability to build more homes, demonstrating the latent potential of a sector that can play a much larger role in tackling the gap between supply and demand of new homes.”

Mr Berry added: “The government will need to work closely with industry to ensure this policy is delivered in a way that is accessible and that enables both existing SMEs and new entrants to make maximum use of such a substantial fund.”

Chancellor backs infrastructure commission

The chancellor, Philip Hammond, has reaffirmed the government’s commitment to the National Infrastructure Commission.

He told the Conservative Party Conference today: “Ensuring we have world class infrastructure is vital to maintaining our competitiveness but it is a very long-term agenda. One that can be, and often has been, knocked off course by short-term political considerations.

“That’s why we announced the National Infrastructure Commission. To define independently the nation’s long-term infrastructure needs; to prioritise and plan; to test value for money; to ensure that every penny spent on infrastructure is properly targeted to deliver maximum benefit.

“And today I recommit to putting the Commission at the very heart of our plans to renew and expand Britain’s infrastructure… making sure that it is long-term economics, not short-term politics,that drives Britain’s vital infrastructure investment.”

Mr Hammond also admitted the UK’s infrastructure was not up to scratch at the Conservative Party Conference today.

He said: ”Our stock of public infrastructure – like our roads, railways and flood defences – languishes near the bottom of the developed-countries’ league table after decades of under-investment.

“And our businesses, too, are not investing enough. All of this must change to build an economy that works for everyone. We need to close that gap with careful, targeted public investment in high value infrastructure and encouragement of more private investment in British businesses.”

HomeOwners Alliance chief executive Paula Higgins said: “The government is finally recognising that building new homes is where they need to focus to create a sustainable economy.

“It’s not just their moral duty to build these homes. We would remind ministers and homebuilders that it is also their moral duty to build homes that are fit for purpose – high-quality homes that meet the requirements of not only first-time buyers but of last-time buyers as well. We must build homes people would be proud to live in, not that make the most profit for the builder.

“More homes will not be enough to tackle the ever widening gap between wages and house prices and it needs to look at ways to help the current generation that is priced out.”

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