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36/05

1 April 2005

Homes for all - Expanding opportunities for home ownership

More people will have the opportunity to own an affordable well-designed home, the Deputy Prime Minister John Prescott and Chancellor Gordon Brown announced today.

John Prescott launched further details of the Design for Manufacture competition, challenging house builders to design high quality homes with a construction cost of around £60,000. Public sector land is being provided for 1,000 homes; the first phase of 470 homes are to be built at Oxley Park, Milton Keynes; Oxford Road, Aylesbury; Upton, Northampton and Allerton Bywater Millennium Community, near Leeds.

The Government's national regeneration agency English Partnerships (EP) will also oversee the delivery of thousands more affordable homes on many of the sites in a portfolio of nearly one hundred ex-NHS sites, the first tranche of which will be transferred from the Department of Health to EP next week.

Deputy Prime Minister John Prescott said:

"Improving access to high quality, affordable housing is crucial to our policy of increasing prosperity and social justice in every region. We have shown that with imagination and determination it is possible to provide attractive homes in good locations, while protecting the countryside and combating sprawl. By insisting on higher design standards we can build more homes using less land to create truly sustainable communities."

Chancellor Gordon Brown said:

"The Britain I believe in is a Britain of ambition and aspiration where there is no ceiling on talent, no cap on potential, and no limit to opportunity. And this Britain of ambition and aspiration is a Britain where more and more people must and will have the chance to own their own homes.

“With home ownership expanding into new areas and new groups, today I see Britain as one of the worlds greatest wealth owning democracies where the widely held chance for not just some but all to own assets marks out a new dimension in citizenship and makes Britain a beacon for the world. Assets for all enabling opportunity for all.”

Low cost home ownership received a further boost today when the Deputy Prime Minister launched a key consultation paper, setting out Government's proposals to introduce simpler, fairer home ownership opportunities for more people, whilst protecting the supply of social homes.

HomeBuy: Expanding the Opportunity to Own extends the HomeBuy scheme, first announced in the ODPM's five year strategy, Sustainable Communities: Homes for All (January 2005).

HomeBuy will help key workers, social tenants and other first time buyers to buy a share of a home and so get a first step on the housing ladder - with three variants offering choice in the type of home people can buy:

• New Build HomeBuy and Open Market HomeBuy would take elements of existing low cost home ownership schemes to offer simpler, fairer assistance to those who want to buy a share of a new home built with public subsidy, or a share of a home that is for sale on the open market;
• Social HomeBuy would introduce new opportunities for thousands of social tenants who cannot afford or do not have the Right to Buy to buy a share of their existing home with a discount on their share - and would protect the supply of social homes by enabling landlords to reinvest sales proceeds.

Homes for All announced that over 80,000 households will be helped into home ownership by 2010. The Government now proposes to go even further. It is at an advanced stage of discussions with the Council of Mortgage Lenders to help an extra 20,000 first time buyers by introducing private finance to fund equity loans - meaning that New Build and Open Market HomeBuy could help up to 100,000 into home ownership by 2010.

Deputy Prime Minister John Prescott, said Social HomeBuy would help councils and housing associations to deliver the Government's five-year strategy on sustainable communities.

"Social HomeBuy will support regeneration and the creation of more mixed communities on estates. Working tenants will be able to realise their home ownership aspirations without leaving their existing home, meaning a better mix of incomes in neighbourhoods, and more sustainable communities.

"Of course not everyone wants to be a homeowner - some prefer or need to rent in the social sector. Protecting the supply of social housing and helping those who are homeless or living in temporary accommodation is a top priority. Because the proceeds of Homebuy will be reinvested in housing we will be able to free up social lets for those who most need them."

He added that, in this way, helping 5,000 more people a year into home ownership through Social HomeBuy could also assist an additional 9,000 households out of temporary accommodation by 2010.

The consultation closes on 24 June 2005. The Government is aiming to work closely with local authorities, housing associations and other key stakeholders to have the new HomeBuy arrangements up and running by April 2006.

Notes to editors

1. The Government recently set out its five year strategy for delivering sustainable communities. The strategy, which is in two parts - "Sustainable Communities: Homes for All" and "Sustainable Communities: People, Places and Prosperity" adds up to a comprehensive programme for delivering places where people want to live and work right across the country.

2. Sustainable Communities: Homes for All builds on the housing objectives - addressing imbalances between housing supply and demand, improving the condition of the existing stock and tackling disadvantage - set out in the Sustainable Communities Plan. These objectives are supported by the provision of resources for housing investment by local authorities and housing associations. Details of the regional allocation of these resources announced today are set out below.

3. Sustainable Communities: Homes for All also set out proposals to offer simpler, fairer home ownership opportunities through an extended HomeBuy scheme. The consultation paper launched today, HomeBuy: Expanding the Opportunity to Own, sets out and seeks views on the detail of the Government's proposals, summarised below.

4. Former NHS sites to be transferred to English Partnerships - Many of the 67 sites transferring to EP next week, totalling around 932 ha, will be used to respond to housing needs, especially those presented by the first time buyer market and to promote the regeneration of priority areas in line with the Sustainable Communities Plan. Although more detailed analysis has yet to be carried out, it is estimated that the total portfolio of NHS sites (96) could accommodate up to 15,000 new homes nationally, with at least 5,000 being affordable.

5. Media enquiries should be addressed to Charlotte Morgan at ODPM press office on 020 7944 3049 or Marie-Anne Davies at the Treasury press office on 020 7270 5946 .

6. Non-media enquiries should be addressed to the ODPM Correspondence and Enquiry Unit on 020 7944 4400 or the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk.

7. This press release and other Treasury publications and information are available on the Treasury website at www.hm-treasury.gov.uk. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.

ANNEX A - SOCIAL HOMEBUY EXPLAINED

Social HomeBuy - who will be helped

Right to Buy

Average value of a property bought under the Right to Buy in London was £104,000 in 2003-04.
Average household salary needed to buy this under the Right to Buy is around £24,000 (roughly the 50th percentile of London salaries).
(Assuming a 5% deposit, the average household salary needed to pay £83,500 (£104,000 less £16,000 discount and £4,500 deposit is around £24,000).

Social HomeBuy

Under our proposals for Social HomeBuy, households with a salary as low as £16,000 (roughly the 25th percentile of London salaries) might be able to buy a discounted 50% share of the same property.

Transparent affordability checks will be put in place to ensure that applicants were able to afford the costs of home ownership over the longer term - so not everyone on £16,000 will necessarily be eligible. However, it is likely that Social HomeBuy will extend help to some people in the lowest quartile of incomes in London (which are £18,000).

ANNEX B

NHS SURPLUS LAND SITES TO BE TRANSFERRED IN FIRST TRANCHE APRIL 2005