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Government freezes threshold on New Homes Bonus

Words: Huw Morris
New Housing iStock

The New Homes Bonus threshold is set to be frozen next year as the government unveiled a modest £20 million increase in the programme.

The move, part of the provisional local government settlement, means the baseline rate for housing growth, below which the bonus is not paid, will remain at 0.4 per cent. Housing and communities secretary James Brokenshire said the freeze was a further incentive to local authorities to “welcome housing growth and build more homes”.

In September, the District Councils Network warned that any plans to increase the baseline would be “perverse” and would penalise “the very councils which have succeeded in meeting the government’s housing targets”.

The bonus was introduced in 2011 by the coalition government to encourage councils to grant planning permission for new housing in return for additional revenue.

The Local Government Association welcomed the move, noting the bonus makes up “a considerable part of funding for some councils”, particularly shire districts and rural authorities.

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