Government sets up £3bn fund to get small firms building homes

Smaller firms will be able to access a fund of £3bn in loans in order to build tens of thousands of new homes, says Sajid Javid.

After presenting a long-awaited housing white paper, the Communities Secretary said that 60 per cent of new homes are built by just ten big firms. He called for diversification to increase these numbers.

The UK is currently building fewer than 150,000 homes a year, well short of demand which experts reckon is for upwards of 250,000 homes a year.

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"The government's aim is to help small firms build more than 25,000 new homes by 2020 – and up to 225,000 in the long-term – by providing them with loans," says Sky News.

Overall, the government is aiming to build one million new homes by 2020.

The loans scheme is just one of a number of proposals in the paper, which sets out a strategy to speed up the progress from planning to development and encourage new homes to rent as well as to buy.

One thrust of the plans is to force local councils to assess "realistically" housing demand in their areas and update this every five years, says The Guardian.

They will be expected to schedule new housing developments to meet this demand.

Asked about concerns over whether it would be difficult to ensure consistency and transparency in how councils assess demand, a source in the communities department said that the authorities would be consulted on a "new approach".

Elsewhere, developers will be encouraged to "build higher" where there is a shortage of land, such as next to public transport links. Developers will also be forced to begin developing within two years of planning permission being granted (at the moment it's three).

There will also be pressure to build more homes to rent and offer renters longer-term secure tenancies.

Labour's shadow housing minister John Healey is not impressed. He said: "The measures announced so far in Theresa May's long-promised housing White Paper are feeble beyond belief.

"After seven years of failure and 1,000 housing announcements, the housing crisis is getting worse not better."