Government should create £4bn Housing Accelerator Fund, says Housing Forum

The Housing Forum is calling on the next government to create a £4bn Housing Accelerator Fund to deliver 60,000 new affordable homes, as part of its general election housing “manifesto”.

The forum said that building 60,000 new affordable rented homes would help to tackle the backlog, reduce homelessness by more than half over three years and slash expenditure on temporary accommodation.

A Housing Forum spokesperson said the ”accelerator fund” would take the form of an additional £4bn in grant funding, which would prime much-needed extra money into the social housing sector, and equate to a subsidy of around £67,000 per home depending on whether it goes towards building social or affordable rent homes, to help people out of temporary accommodation. 

To drive up housing supply, the housing membership network, which is comprised of more than 150 organisations, has said the government needs to incentivise local authorities meeting “ambitious housing targets”.

This would require local authorities to maintain a five-year land supply and, if they meet or exceed their targets, they would receive increased infrastructure funding.

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The Housing Forum’s Manifesto for Housing 2024, which was published today, urged all political parties to commit to a long-term plan for as long as 25 years.

The document proposes that the government should underwrite borrowing for social landlords and the Build to Rent sector to reduce the expenses associated with obtaining private financing for housebuilding.

It states that the government should also commit to a long-term grant settlement for building affordable homes, enabling flexibility in terms of how grant funding is used in changing market conditions.

On section 106 and the Community Infrastructure Levy, the Housing Forum has reaffirmed its calls to improve the existing system rather than introduce a new system “that may not have the flexibility needed to deliver the most from affordable housing”.

In the Levelling Up and Regeneration Bill the government said it intended to replace section 106 agreements and the existing Community Infrastructure Levy (CIL) with a new Infrastructure Levy.

CIL is a charge levied by councils on new developments to help fund the delivery of local infrastructure. Section 106 requires developers to ensure a certain percentage of homes in a scheme are affordable.

The new Infrastructure levy would be a locally-set, mandatory charge levied on the final value of completed development to replace the existing system of developer contributions. 

Housing experts, such as the British Property Federation, have voiced concern that the new infrastructure levy would reduce the amount of affordable homes delivered by developers. 

According to data from the Home Builders Federation (HBF), the proportion of new Affordable Homes provided through Section 106 either directly or indirectly has grown to around 50%. 

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In addition, the manifesto asserts that the government should end Right to Buy to preserve the current stock of affordable housing for future generations. It adds that this is particularly important for new-build council housing so that councils have a stronger incentive to build.

Shelagh Grant, chief executive of the Housing Forum, said: “A lack of affordable quality housing is the main problem holding back Britain. It limits people’s prosperity, keeps them in poor health, and stops them from reaching the opportunities they need to thrive. Our manifesto is a roadmap not just to solving the housing crisis at hand, but for setting the housing sector on a positive trajectory for generations to come.”

Stephen Teagle, chair of The Housing Forum and cheif executive of Vistry Partnerships, said: “It is positive to see the main political parties taking housing seriously, but a long-term plan is needed to deliver the scale of new housing – and in particular affordable housing that is needed. We need commitment from all political parties to putting housing at the heart of government.”