The FirstBuy Direct scheme was launched in June 2011 and involves the government and selected house builders jointly providing equity loans of up to 20% of the price of a new-build home. This means eligible purchasers only need to find a 5% deposit to qualify for a 75% mortgage.
Other government measures announced today include removing restrictions on housebuilders to help unlock 75,000 homes currently stalled due to sites being commercially unviable. Developers who can prove that council’s costly affordable housing requirements make the project unviable will see them removed.
There will be new legislation for government guarantees on up to £40bn worth of major infrastructure projects and up to £10bn of new homes. The Infrastructure (Financial Assistance) Bill will include guaranteeing the debt of Housing Associations and private sector developers.
The government said these plans will produce up to 15,000 affordable homes and bring 5,000 empty homes back into use using new capital funding of £300m.
There will be an additional 5,000 homes built for rent at market rates in line with proposals outlined in Sir Adrian Montague’s report to government on boosting the private rented sector; and for a limited period, the government will also slash the red tape that prevents families and businesses from making improvements to their properties.
The Prime Minister, David Cameron said: “The measures announced today show this government is serious about rolling its sleeves up and doing all it can to kick-start the economy. Some of the proposals are controversial; others have been a long time in coming. But along with our Housing Strategy, they provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation.
“That means more investment around the county; more jobs for our people; and more young families able to realise their dreams and get on the housing ladder.”
The Deputy Prime Minister, Nick Clegg added: “Today’s major boost to housing and planning will make it easier to build a home, easier to buy a first home and easier to extend a home – a boost that will get Britain building again. Building thousands of affordable homes and generating thousands of new jobs.”
Chris Wojtulewski, director of the planning consultants Parker Dann, said: “The free-for-all on conservatories and bigger extensions may go down well with voters in the Tory heartlands, but it’s by no means a game changer.
“More controversial, but potentially much more effective, are the measures to get the diggers rolling on developments that are currently stalled.
“But this could be drastic medicine, with severe side effects. The idea that the private sector will step in to replace council housing schemes dates back to the Thatcher era. Now, that orthodoxy is being put on hold in an attempt to kick-start the stalled construction sector.
“The trouble is that in a stagnant economy, the need to build more homes is greater, and so is the need for more social housing.”