The chancellor has announced plans to launch a £7.1bn National Home Building Fund as part of his Spending Review today.

Rishi Sunak said the investment would be on top of the £12.2bn Affordable Homes Programme previously announced.

The Spending Review documents published after the chancellor’s speech reveal further details of the new fund:

• They state that NHBF’s initial £7bn investment will be spread over four years to “unlock up to 860,000 homes”
• The documents confirm £4.8bn of “capital grant funding, including for land remediation, infrastructure investment, and land assembly”.
• Delivery of the Brownfield Fund, announced at Budget 2020 for Mayoral Combined Authorities
• An additional £100m for non-Mayoral Combined Authorities in 2021-22 to support “housing delivery and regeneration, including unlocking brownfield sites, regenerating estates and releasing public sector land – including serviced plots for self and custom builders”.
• £2.2bn of new loan finance “to support housebuilders across the country.” This includes “delivering Help to Build for custom and self-builders, and funding for SMEs and modern methods of construction”.

The documents state that further funding for the NHBF will be confirmed at the next multi-year spending review,

They also confirm the government’s promise to provide £10bn to support infrastructure needed for new homes and £12.2bn through the Affordable Homes Programme to deliver up to 180,000 new homes for affordable homeownership and rent.

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Hopefully, the funds will be used to improve the pace of supply of affordable new housing for sale and to rent in places of most need.

“Further support for first-time buyers when the stamp duty concession ends and Help to Buy Part 2 begins in the spring, are other areas which could help keep transaction numbers up. 

“Their value to the wider economic recovery, particularly employment, has proved so crucial in recent months.

“Stimulation of infrastructure expenditure would be most welcome too as these projects are often the cause of delays in the delivery of housing.”

Landbay chief executive and economist John Goodall says: “In a year that has seen the highest borrowing in peacetime history, the housing market has held up remarkably well. 

“Buoyed by the stamp duty holiday, demand to buy still outstrips the supply of housing by some margin, so the need to increase the housing stock grows ever more urgent. 

“The chancellor’s £7.1bn national home building fund is a step in the right direction but needs to translate into action, so we really see more homes being built and quickly. 

“With unemployment to hit 7.5 per cent next year and stamp duty reintroduced, it will be harder for many people to buy, but that doesn’t take away the need for housing.  

“With councils and housing associations unable to meet this need, that demand will inevitably fall on the private rental sector instead. 

“While the government needs all the income it can get, a tapering of the stamp duty holiday beyond March 31 and support for landlords to provide good quality rental property is what is required to help meet this housing need as the demand for rental property is likely to hit heights not seen in modern times.”