Government to directly commission 13,000 new homes

In what the prime minister David Cameron described as a "huge shift in government policy" but which was derided by Labour as “spin”, Number Ten today announced the direct commissioning of the building of up to 13,000 homes on public land.

Smaller developers will be able to purchase sites in England with planning permission in place and 40% of the new-builds will be starter homes aimed at first-time buyers.

Direct commissioning will allow the government to take control of developing land, instead of large building firms and some reports today described the move as akin to the “nationalisation of house building”. Speaking to BBC Radio 4's Today programme, communities Secretary Greg Clark said that the government was "pulling out all the stops to get the country building".

Clark said that for many years home ownership has been in decline and the government wanted to reverse that decline. While the eight biggest building firms accounted for 50% of the house-building market, Clark said there was a need to involve smaller and medium-sized companies.

Initially, up to 13,000 homes are to be built on five publicly-owned sites in 2016. The move appears to represent an ideological shift for a Conservative administration given the extent of state involvement, though it’s worth noting that starting 13,000 homes is a very small number compared with the million homes that the government wants built by 2020.

By 2020, the government wants to build 200,000 starter homes for first-time buyers under 40 at a minimum 20% discount price. Discounts will apply to properties worth up to £250,000 outside London, or £450,000 in the capital.

A pilot for the scheme will start on five sites:

  • Brownfield land at Old Oak Common, in north-west London
  • Former Connaught Barracks, in Dover 
  • Ex-MoD land at Northstowe, in Cambridgeshire 
  • Former hospital site at Lower Graylingwell, in Chichester 
  • MoD site at Daedelus Waterfront, in Gosport

The government has also announced a £1.2bn fund to help developers prepare brownfield land for building and Downing Street says the move will create at least 30,000 new starter homes by 2020.

Labour meanwhile criticised the announcement, with shadow housing minister John Healey saying that the numbers were a "drop in the ocean" compared with the number of homes needed. With home ownership at its "lowest level in a generation", Labour said the move was “spin” to hide the prime minister’s failure on new homes.

Healey said the announcement did not promise new investment or affordable homes beyond those already announced.

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