Housebuilding to be more concentrated in the North after Tory backlash

More investment in housebuilding will be directed to the North, Robert Jenrick has said, after the Housing Secretary “updated” rules after calls from Tory MPs.

Mr Jenrick said the Government remains committed to building 300,000 new homes a year in England despite revising the way targets are calculated.

It comes after former prime minister Theresa May was among senior Tories warning that the computer-based formula proposed by the Government in August would lead to large swathes of southern England being “concreted over”.

And Mr Jenrick said the changes to the methodology used to determine roughly how many homes should be built in each council area would bring a with new development concentrated on brownfield sites.

He said it will enable office and retail space in urban centres to be repurposed for housing in the wake of the coronavirus pandemic.

“We have made a very clear commitment to build a million homes over the course of this parliament and to get housebuilding in this country up to 300,000 (a year),” he told BBC Radio 4’s Today programme.

“People understandably wanted more homes to be built in urban areas on brownfield land first to protect the countryside because that is where the transport infrastructure is – the jobs and opportunities – and it is the most environmentally sustainable way to build.

“Secondly, they wanted to try to use housing to the extent that you can to push private sector investment into the cities of the Midlands and the North as part of our commitment to levelling up.

“That is what we have done in this update to the methodology. We are going to provide them with more resources for regeneration and brownfield land remediation.”

The changes aim to encourage more building in the nation’s 20 largest cities to help revitalise high streets in the recovery from the coronavirus crisis that has hammered retailers.

Ministers will also revise the “80/20” rule that guides funding to ensure it is not concentrated in London and south-east England.

Thirsk and Malton MP Kevin Hollinrake, who led a group of more than 30 Tory MPs in writing to the Chief Secretary to the Treasury calling for the rule to be looked at again, said he was “very pleased”.

Research from group Homes for the North’s identified the 80/20 rule, used by Homes England for the distribution of housing infrastructure investment, as an obstacle to the levelling-up agenda.

Researchers found it had led to only 12 per cent of the £5.5bn Housing Infrastructure Fund being allocated to the North by the end of March 2020, a fraction of its share of English households at 28 per cent.

Nigel Wilson, Chair of Homes for the North said: “We welcome today’s announcement.

Homes for the North has long been lobbying Government to look again at its housing policy

that has been hampering growth in the North.”

He added: “Homes for the North, with the support of political and business leaders, has been calling for a change to the funding rules and planning formula to ensure the right homes are built in the right places. We are really pleased that the Government has been listening and seems to be serious about changing policies which have been a real barrier to the delivery of the type of homes that are needed in the North.”

But he said he would be “watching carefully to see if the detail to come matches up to the positive headlines announced today”.

Mr Hollinrake said the letter had “caused some consternation in certain Government circles” but he said it was “important, because this stuff gets missed and people thought it was all about the Green Book.

“But not everything that happens in Government is to do with ministers, I think officials have a different view, which is why it’s been stuck this way for so long.”

There will also be a new £100m “brownfield land release fund” to promote urban regeneration and development on public sector land.

Ministers are also allocating more than £67m in funding to the West Midlands and Greater Manchester authorities to deliver new homes.

Tracy Harrison, Chief Executive at Northern Housing Consortium said: “We welcome Government’s recognition that the current 80/20 funding rule is concentrating funding in London and the South East. It is vital that the new National Home Building Fund lives up to its name, delivering truly national support and giving the North a more equal opportunity to level-up.

“We are concerned that Government proposes to ‘revise’ the 80/20 rule rather than scrapping it altogether as many in the North have called for, and will be engaging with the Ministry of Housing, Communities and Local Government (MHCLG) on their plans.

“We also welcome the confirmation of plans for the further £100m announced for Brownfield site at the Spending Review and will be bringing colleagues from non-mayoral areas together with MHCLG officials in January to discuss this opportunity and other ways Government can support the development of new homes in non-MCA areas.

“Earlier this year we established that £276m of the previously announced £400m fund was allocated to CAs in the North, recognising the opportunity to level-up with new homes on tricky brownfield sites.”