David Cameron said during the Conservative party conference that the bigger price discounts on the existing right to buy scheme could generate funds to build new social housing on a one-for-one basis.
Residents typically pay around 90% of the market price for their home. Bigger discounts should mean more houses sold and therefore more houses built.
The build now, pay later scheme was first announced in March and the government claims Britain could see 100,000 homes built on state-owned land with no upfront cost to developers by 2015.
By giving away public land to housebuilders and only taking payment once the homes are sold the government hopes to revive the flagging building industry.
Grenville Turner, chief executive of Countrywide, said: “It is high time that the government finally put some much needed thought and investment into boosting not just affordable housing but also the wider market.
“Government proposals to support the housing market are always welcomed, however it is important that these initiatives can make a lasting difference that will support the market in the long-term.”
Turner said the proposal of reinvesting back into the housing sector in order to build the proposed figure of 200,000 homes through both schemes, would go some way to appease the chronic shortage of housing supply, if delivered.
“It will also promote greater choice of properties for buyers and go some way to support price stability in the future,” he continued.
“Build now, pay later is a very practical solution to encourage new housing supply on public sector land and will go some way to invigorate builders’ appetite and alleviate the pressures of upfront costs.
“This program could bring the development of these sites forward much sooner, encouraging new investment and employment growth while also achieving housing delivery goals. We welcome the roll out of this proposal as soon as possible.”
