Government announces regeneration package

Thu 6th September 2012, 11:40 am

Legislation to underwrite borrowing for infrastructure and private sector rented housing, plus a new “shop window” for public sector surplus land, are included in a package of measures announced to boost economic development.

Government: Major regeneration package announced

The package also announced the introduction of legislation to implement a July promise to underwrite £50 billion of borrowing to finance infrastructure and housing. The Infrastructure (Financial Assistance) Bill will guarantee debt of £40 billion for major infrastructure projects along with £10 billion for housing associations.

A DCLG statement said: “The government will use its hard-earned fiscal credibility to pass on lower costs of borrowing to support the long-term delivery of new rental homes. To give institutional investors the assurance they need to invest in this area we will be issuing a debt guarantee for up to £10 billion…”

It said that the money would also be spent on helping to deliver 15,000 new affordable homes, though there was no indication on the split between affordable and private sector rented homes. Housing associations and private developers have been invited to submit expressions of interest in benefitting from the housing debt guarantee scheme.

About £300 million of capital will also be injected into the affordable sector, which will also be used to help bring back 5,000 empty homes into use.

The government also committed to underwriting £40 million of debt for major infrastructure projects, as previously announced.

The DCLG also said that it would strengthen the role of the Homes and Communities Agency in accelerating the release of public sector surplus land “by preparing the land for market and providing a single ‘shop window’ for all surplus public sector land”, and that it would work with London mayor Boris Johnson on a similar approach for the capital.

The housing announcement was welcomed by David Orr, chief executive of the National Housing Federation, who said: “This stimulus package is a major step forward. The government’s £10 billion financial guarantees, together with the extra £300 million for affordable and empty homes, has the potential to transform the housing market.

“It will provide homes for some of the millions of families on waiting lists, create jobs and give the UK economy a shot in the arm with a speed and effectiveness few industries can match.”

As well as projects in the National Infrastructure Plan, the Treasury previously announced that it will also consider "other exceptional projects of national or economic significance on a case-by-case basis".

Liz Peace, chief executive of the British Property Federation, said: “Taken together these measures will certainly provide a shot in the arm for housebuilding. However, they will only solve housing issues if accompanied by a significant package of other measures. 

“House builders are not on strike; they are simply not building because there are few people in a position to buy, or seeking to move.

“We are therefore pleased to see support to access home ownership and measures to encourage renting are also seen as important parts of this package. Simply building homes for non-existent buyers has been tried before, in Spain and Ireland, with disastrous consequence.”

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