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Government to help smaller builders build thousand of news homes

The government will help SMEs build thousands of new homes across the country as part of its “radical” direct commissioning housebuilding policy.

An initial wave of 13,000 homes will be directly commissioned by the government across five publicly owned sites that already have planning permission, with 40 per cent of these earmarked as Starter Homes.

The government hopes that offering sites with planning permission will enable smaller companies, currently unable to take on big projects, to help meet housebuilding targets.

The government has set out an ambition to build a million new homes by 2020.

Communities secretary Greg Clark said: “We’re pulling out all the stops to keep the country building with a clear ambition to deliver a million homes by 2020 and support hard-working people into homeownership.

“Today’s radical new approach will mean the government will directly commission small and up-and-coming companies to build thousands of new homes on sites right across the country.”

The move will mark the largest housing project undertaken by central government since Margaret Thatcher and her then chancellor Michael Heseltine began the Docklands regeneration in the 1980s.

Of the 13,000 homes, 40 per cent will be sold as part of the government’s Starter Homes initiative, which offers first-time buyers under the age of 40 a 20 per cent discount on a home’s sale price.

The announcement follows a number of initiatives unveiled in chancellor George Osborne’s Spending Review in November. These included a target to build 200,000 new Starter Homes by 2020.

The policy will effectively see the scrapping of planning authorities’ obligation to provide affordable rented homes, meaning developers will no longer be forced to offer low-cost rented homes as part of new developments.

A report published by Shelter said only “the lucky few” who are on some of the highest wages would be able to afford ‘starter homes’ in the majority of areas in England.

It estimated that dual income households with no children would have to be earning £111,010 in order to afford a ‘starter home’ in all local authorities.

The five sites earmarked for development are:

  • Connaught Barracks in Dover – a former MoD site
  • Northstowe in Cambridgeshire – a proposed new town
  • Lower Graylingwell in Chichester – an HCA acquired site
  • Daedelus on Waterfront in Gosport – part of a former MoD site
  • Old Oak Common in north-west London – a major regeneration project

Federation of Master Builders chief executive Brian Berry hailed the government’s move, saying the availability of small sites was “the single biggest barrier to SME housebuilders increasing their output”.

He added: “It is also encouraging that the majority of these sites will already have planning permission in place, as obtaining permission is all-too-often a lengthy and protracted process; avoiding this time delay should help housebuilders increase their supply much more quickly.”

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