New national housing fund 'offers Government way to build homes it needs'

A new national housing fund should be created to invest in building 40,000 extra homes per year, a report has urged.

The ResPublica think tank said that such a fund could use £100 billion of repayable investment to transform Britain's housing situation over a decade.

If the Government launched that type of fund with leading housing associations it could deliver at least 40,000 new homes annually, boost public finances by £3.4 billion, and create 180,000 new jobs in the construction sector, the report said.

Under the proposal, housing associations and the Government would each hold a 50% stake in the fund, with the associations managing the properties, and ministers providing money via government bonds.

Rental income would then cover the cost of the Government's interest payments, ResPublica said.

The move could ease rent rises as one in seven households spend 50% of their income on housing, according to the study.

Director of ResPublica, Phillip Blond, said: "Successive Governments have failed to build enough homes, or enable enough homes to be built, and the election demonstrated that voters will punish parties at the ballot box if their housing offer is not credible.

"We must make radical changes if we are going to address a problem which is dividing our society between those who can afford to enter the property market and those who are priced out - the haves and have nots.

"Our national housing fund offers the Government a way to finally build the homes it acknowledges it needs.

"Through the notion of a guaranteed buyer we reinvent the only formula that has ever enabled the state to build at scale."