Government to directly commission 13,000 new homes

In an unexpected announcement, the government says it will "directly commission" companies to build up to 13,000 new affordable homes on public land, instead of relying on the market to trigger construction.

The "radical" announcement will see the government take responsibility for developments, help small firms and speed up house building according to Prime Minister David Cameron. 

Downing Street describes the move as a "radical new policy shift" with the homes earmarked for five publicly-owned sites; some 40 per cent of the new homes are understood to fall into the government’s ‘starter home’ category, and work on all sites will begin this year. 

The sites are:

- brownfield land at Old Oak Common, in north-west London;

- former Connaught Barracks, in Dover;

- ex-MoD land at Northstowe, in Cambridgeshire;

- a former hospital site at Lower Graylingwell, in Chichester;

- Ministry of Defence land at Daedelus Waterfront in Gosport.

Cameron describes this as "a huge shift in government policy" and says “nothing like this has been done on this scale in three decades - government rolling its sleeves up and directly getting homes built."

Richard Donnell, director of research at Hometrack, says one of the greatest challenges to growing housing supply has been the loss of capacity from small builders whose numbers have halved between 2007 and 2013. 

“Only 2,710 are estimated to have been building in the last year. The barriers to small builders developing homes have risen with planning and finance risks limiting access to the market” he says.

“The government needs as many types of builder as possible to meet its target to grow supply. While the number of homes announced is relatively small it sends the message that smaller builders have an important role to play if we are to grow housing volumes.”