The accelerated construction fund, announced at this week’s Conservative Party conference, will be used to guarantee housing developments, with the government effectively using its balance sheet to underwrite the risk developers take…
This week communities secretary Sajid Javid said the £2bn fund, which will be paid for through additional government borrowing, would only apply to schemes on public land and would back the construction of an extra 15,000 homes by 2020.
“We will take government-owned land and partner with contractors and investors to speed up house building,” he said. “We will create new supply chains using offsite construction. And we will encourage new models of building to make houses that people want, more cheaply and at pace.”
Sounds like a massive slush fund to me.
Wouldn't it be easier and cheaper just to employ all the sub-contractors whom the 'home builders' would have employed to build social housing on the government-owned land for affordable rents? If offsite construction is the way forward (cheaper) then that is how they will be built, for half the price that Mr Javid wants taxpayers to pay (£133,333 per unit).
The waiting lists are far too long, so if there is a 'market failure' (Theresa May's phrase of the week) it is here. The effective interest rate on the money spent/borrowed is effectively zero and the principal can be paid off from the rental income/savings in Housing Benefit to private landlords.