News story

New Homes Bonus boosts spending power for local communities

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

England's councils to share £668 million in 2013 to 2014 to help provide new homes.

Row of new houses.

Councils and communities that have welcomed growth in their area are getting a major boost to their spending power, Housing Minister Mark Prisk announced today (1 February 2013).

The minister published the final allocation of cash payouts worth £668 million through the New Homes Bonus, which will be shared by England’s 353 councils.

The funding will reward councils for delivering over 142,000 new homes, including 58,000 affordable properties, and bringing almost 18,000 long-term empty properties back into use.

Mr Prisk said that encouraging growth was a positive way for councils to raise revenue for their local community. The cash payments are rewarding councils from all parts of the country, with almost a third of the top 30 recipients in the midlands and the north.

Payments through scheme reach £1.3 billion

Today’s final allocation, to be paid in the 2013 to 2014 financial year, means councils will have received £1.3 billion through the New Homes Bonus since its launch in April 2011.

This total recognises over 400,000 new builds and conversions, and over 55,000 empty properties that are being lived in once again.

Through the New Homes Bonus, the government matches the Council Tax raised from new homes for the 6 years. The bonus is also available for reducing the number of long-term empty homes, and there is an additional £350 annual premium for new affordable homes.

Councils should work with their local community to decide how the bonus is spent: whether building more homes, keeping Council Tax down for local residents, boosting frontline services like rubbish collection or providing local facilities like swimming pools and leisure centres.

Housing Minister Mark Prisk said:

“This country needs to build more homes, and that’s why the government is giving communities a reason to say ‘yes’ to growth through the New Homes Bonus.

“We’re backing those councils that build the homes people need. This brings the New Homes Bonus to £1.3 billion, and is a direct result of 142,000 homes being built, plus a further 18,000 long-term empty homes being brought back into use. That’s good news for councils, communities and families”.

Local spending boost for communities

Councils across the country have been using this additional funding to support services and benefit their local communities. These include:

  • Wakefield District Council, who teamed up with a local credit union to launch 3 new loans, funded via the New Homes Bonus, to help owners repair their properties and rent them out or sell them

  • Leicestershire County Council, who allocated their Bonus grant for delivering more rural housing in the county, which has helped to develop 12 new affordable homes in Sapcote; the council are also investing £1 million to enable the delivery of 60 new homes, for rent or shared ownership schemes in villages, so families and young people are not forced to move out by high prices

  • Milton Keynes Council, who will allocate part of their bonus to purchase publicly owned land in their area, which they will use for investment in new homes and infrastructure, creating jobs for local people.

  • North Tyneside Council, who allocated some of their bonus grant towards a £3.1 million revamp of a library in North Shields; the library is helping to regenerate the square, which will now include refurbished residential properties for the first time in decades

  • Warwick Council, who entered into a 10-year partnership with the Waterloo Housing Group to deliver new affordable homes in the area, with all New Homes Bonus payments generated by additional new homes recycled back into the scheme

Further information

A full list of allocations of New Homes Bonus for the 2013 to 2014 financial year can be found on our policy page.

Published 1 February 2013