New Homes Bonus Scheme to aid housing shortage

New proposals by the Coalition Government will give local councils in England extra money for all new homes built. Under the New Homes Bonus Scheme, announced by Housing Minister Grant Shapps, a grant equivalent to the council tax for each new home will be paid to the councils for the next 6 years. The councils will be able to decide how to spend the money.

The scheme is aimed at reducing the chronic housing shortage in England. There are currently some 4.5 million people on council waiting lists, but only 120,000 properties were built last year.

The Shadow Housing Minister, John Healey, said the programme was a con, as the money will be taken from existing grants to councils, and not be new money at all.

David Orr of the National Housing Federation said that the “incentive might help persuade local authorities”, but felt that a different strategy was needed, and the end to NIMBY-ism was the key. “There are places all over the country where there is a crying need for new homes, but there are still many, many communities where the default position is ‘we don’t want to see any new homes built here’.

10th August 2010