Out-Law News 1 min. read
21 Nov 2011, 5:08 pm
Prime Minister David Cameron called the long-awaited strategy "radical and unashamedly ambitious".
The strategy pulls together existing housing policies and contains new elements, such as the new build indemnity scheme; a new £400 million "Get Britain Building" fund, and a consultation on proposals to boost stalled developments.
The indemnity scheme will ensure the provision of up to 95% loan to value mortgages for new build properties. It will be launched in Spring 2012 by the Department for Communities and Local Government and HM Treasury and could help to support 100,000 new buyers.
Under the scheme housebuilders will deposit 3.5% of the sale price in an indemnity fund for each home sold through the scheme for seven years. Interest is payable on the money. The Government will provide a guarantee of 5.5% of the property value that can be called on if any losses by defaulting buyers exceed the developer's 3.5%.
The new £400m "Get Britain Building" fund will provide development finance to builders to restart developments that have planning permission but have stalled due cash-flow problems. A prospectus will be published by the end of the year that will provide more detail and invite bids.
The strategy said that there are currently 133,000 partially-built houses that have not progressed within the last 12 months.
The Government will consult on proposals that could allow developers to require local authorities to reconsider section 106 agreements that were agreed prior to April 2010, when the market conditions were better. The consultation is due to be launched by January 2012 at the latest. Section 106 agreements refer to the Town and Country Planning Act and usually require developers to provide infrastructure for communities in which they build.
The strategy has proposed £100m of funding to bring empty homes back into use and a further £50m has been pledged for the areas that have the highest concentration of empty homes.
