The Government is pledging to plough an extra £3bn into affordable housing and introduce measures to stop private-sector builders from “land banking” in its housing green paper published this week.
The £3bn increase will see the Government dedicate £8bn overall from the comprehensive spending review for housing between 2008-11. It says it will build at least 70,000 homes a year by 2011.
Ministers are to look at strengthening the planning rules so that private-sector developers must put in place much of the infrastructure for a site within three years of gaining planning permission.
It will also look at whether accounting rules should be toughened to ensure more consistent disclosure of land holdings.
The green paper proposes a new 17.5 per cent equity loan scheme to help first-time buyers get on the property ladder. It will be available for those earning less than £60,000 a year.
Firstrungnow.com managing director Helen Adams says this would be an improvement on the Government’s Open Market HomeBuy scheme which is only offered by four lenders.
She says: “The widening of the shared equity mortgage market to all lenders in conjunction with a 17.5 per cent Government equity loan product would increase competition among lenders.”