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Questions over effectiveness of government’s £3.3bn New Homes Bonus scheme

The Government’s £3.3bn New Homes Bonus is allocating the highest proportion of funding to areas where approvals are still falling.

The £1.3bn which has so far been delivered to participating local authorities since the scheme launched in April 2011 is having a negligible impact on approval figures, according to the FT.

The New Homes Bonus scheme pays local councils to increase both the number of new homes and the number of long-term empty homes brought back into use. It is paid each year for six years according to the amount of extra council tax revenue raised from introducing or re-introducing new homes.

Research compiled by a former Labour housing minister Nick Raynsford suggests the money may have been allocated to regions where homes would have been built anyway and the 17 regions which received more than £10m have seen a decline in approvals.

The FT’s data for the 15 councils where comparable figures exist notes a 6 per cent drop in approvals for large residential schemes between 2010-11 and 2011-12, from 565 to 531.


Paul Tucker MPC 480

BSA warns negative interest rates will hurt mutuals

The Building Societies Association has warned negative interest rates would hurt mutuals by cutting their main funding line of retail deposits, but brokers say it could bring a much-needed boost to the mortgage market.


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