Carter Jonas
Carter Jonas

Has the New Homes Bonus changed councils’ approach to housing proposals?

The government’s New Homes Bonus (NHB) scheme has handed out more than £3 billion since its introduction in 2011. Questions have been asked about whether the scheme has had any effect on councils’ approaches to building new homes.

The scheme aims to encourage local authorities to grant planning permission for the building of new houses in return for additional revenue. The government matches the council tax earned by local authorities from each new home built, converted or brought back into use over a six year period.

It has been argued that local authorities that were resistant to house building were unlikely to be swayed by the amount of money offered under the NHB scheme. The payments are only made on building completion, which further diminishes the incentive.

The London Borough of Tower Hamlets has benefitted greatly from NHB and is set to receive £28.6 million in 2016/17. A spokesperson for the borough explained that while it’s not possible to pinpoint evidence that completion in the region has increased due to NHB, it does recognise the work done to build affordable housing for people in the borough.

Birmingham City Council is set to receive £21.1 million in 2016/17. Waheed Nazir, strategic director of economy at the council, said: “NHB was an important tool to help accelerate delivery against housing need in the city. Although, even if we didn’t receive the money, the National Planning Policy Framework and the local plan still require us to meet our housing need.”

The general consensus is that NHB has not significantly changed the councils’ approach to housing proposals, but it’s the importance of meeting the housing and growth needs of the city that drives things forward.

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