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Government announces £220 million for affordable homes in the UK

The government has announced that £220 million will go towards building 14,000 new affordable homes across the UK in order to meet the demand for housing. The funding will be shared between around 69 different housing associations and developers who will begin work on the new homes in March 2015. The work will be completed by 2017 ensuring many individuals and families will have affordable housing for the foreseeable future.

The new funding will lead to the fastest annual rate of house building in twenty years and looks set to improve the construction industry and help the UK economy grow. The majority of the new homes will be available at an affordable rent and 2,000 of the homes will be sold through shared ownership. The move will help many people get onto the property ladder and will also increase housing stock, meeting the demand for housing.

The Affordable Housing Guarantee is part of a plan to get Britain building and to increase the supply of housing. The supply is not currently meeting demand therefore the new scheme looks set to improve the housing market substantially. Also included in the scheme is a £19.5 billion public and private investment into an affordable homes programme which will introduce 170,000 new homes by 2015. The government have also announced that they will use £3.3 billion of funding to support the introduction of 165,000 affordable homes to the market by 2015.

Many planned construction developments have stalled or have been put on hold over the last year but the government looks set to use the funding to tackle this problem. So far, the affordable homes programme has helped developments proceed on 50,000 homes and will contribute £474 million to unlock many stalled large scale developments. The government will also use the money to help the private rental sector grow. A Build to Rent fund of £1 billion has been set aside specifically for this purpose.

The fund will be allocated to cities outside of London, with the Midlands getting most of the funding to build affordable housing. The Midlands looks set to receive £63 million, and the North West will receive £56 million. Next in line is Humber with £41 million allocated to the city and the South and the South West look set to receive £36 million. The East and South East will receive £23 million. It is hoped that the new funding will help to continue the recent growth seen in the housing market by lowering the competition and decreasing the price of housing.

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