My right honourable friend the Minister for Housing and Planning (Caroline Flint) has made the following Written Ministerial Statement.

I am today launching a document entitled Facing the Housing Challenge: Action Today, Innovation for Tomorrow. A copy will be placed in the Library.

We know that the vast majority of people aspire to home ownership. This is more than an economic calculation—it represents their hopes and dreams for their families. Across government, we value and support these aspirations. And we are absolutely committed to making sure that everyone can find the housing that meets their needs.

So this time last year, we published a housing Green Paper, setting out our plans for the biggest house-building programme in decades. It set out our long-term plans to meet the housing needs of our aging, growing population, with a major increase in supply to address increasing demand, helping those families and first-time buyers priced out of the property market.

More recently, however, the international housing market has experienced significant challenges as a result of turbulence in the global financial markets. People are finding it harder to get a mortgage; we have seen falls in house prices and housebuilders are now experiencing difficult business conditions after years of extremely favourable circumstances.

But the long-term demographic trends remain the same. And without action now, we risk frustrating many more potential first-time buyers and growing families in the future. Our target to achieve a rate of 240,000 new homes per year by 2016 was set to address these long-term trends and we remain absolutely committed to increasing supply to this level to respond to this long-term demand.

The signs are that current market conditions will lead to a fall in housing completions this year, which makes our targets of 2 million homes by 2016 and 3 million by 2020 challenging, particularly if the current conditions are protracted.

However, the development industry has shown before it is capable of responding and delivering substantial increases in new homes over a short period—from around 130,000 net additions in 2001-02 to approaching 200,000 in 2006-07. We therefore remain committed to our overall target of 3 million homes by 2020 as the right long-term goal, whilst recognising the scale of the challenge this entails.

We need now to retain our focus on stimulating market conditions, seeking new ways to deliver the housing this country urgently needs and ensuring there is a planning framework that will support a rapid market recovery.

So we are publishing this document to set out our next steps in this housing delivery programme, helping to strike the right balance in responding to both current conditions and long-term challenges.

We invest around £6 billion per year in housing and regeneration programmes. Our priorities for these resources are to:

provide greater help for first-time buyers;

help existing homeowners facing difficulties due to problems in the international financial markets;

keep housing supply, particularly affordable housing supply, as high as possible during the current difficulties, in order to keep on track to meet our targets; and

maintain capacity and create the right conditions for recovery and longer-term growth.

We are therefore setting out a package of measures in this document to achieve these objectives. These include:

the pilot of a “rent to homebuy” scheme, led by the Housing Corporation, which will aim to help prospective buyers who are unable to take advantage of current shared ownership schemes, perhaps because they cannot find a suitable mortgage. The scheme will enable eligible households to rent a new-build property, at less than market rates, for a pre-specified period, with the option to buy a share in the home at the end of that time;

plans from the London Borough of Barking and Dagenham, Newcastle City Council, Nottingham City Council and Manchester City Council to launch the first pilot local housing companies. These have the potential to deliver up to 10,000 new homes. They represent a new model of working which combines local authority land assets with private sector investment, enhancing delivery of new homes and communities. This represents just one of the ways that local authorities will play a central role in delivering the housing the country needs;

confirmation that more funding, beyond the £200 million already allocated from the affordable housing budget, could be made available to purchase high quality unsold stock, in the right locations, for the right price. This would help deliver our demanding affordable housing targets, while also supporting housebuilders;

proposals to support delivery of up to 75,000 homes in 20 more towns and cities in the next stage of the growth points programme. These will combine increased housing with new jobs, town centre regeneration, and higher design and environmental standards. We will invest £100 million in helping these areas to realise their ambitions for sustainable growth. Further details of the new growth points can be found in the Partnership for Growth document, being published today, which will be placed in the Library;

provisional allocations of the £510 million housing and planning delivery grant, to support those local authorities that are taking action to meet housing needs, and reward those that are preparing plans and identifying land supply for delivery. We will keep this under review for the next three years to ensure that it remains an effective incentive for delivery. We will also develop proposals for specific incentives to deliver affordable housing from 2010-11. Further details are set out in Housing and Planning Delivery Grant: Allocation Mechanism and Summary of Consultation Responses. A copy will be placed in the Library, along with the schedule of provisional allocations;

a commitment to working with our stakeholders to explore the viability and practicality of mortgage rescue schemes, building on the example of local authorities and housing associations which already offer such schemes;

new consumer advice and information for those concerned about mortgage repayments from the National Housing Advice Service; and

the appointment of Baroness Margaret Ford to work for Partnerships UK in identifying and releasing surplus public sector land for housing delivery, particularly land owned by central government departments and their agencies.

Alongside this document, I am publishing an open letter which sets out our response to the Callcutt review of housing supply. We have accepted a number of the recommendations from John Callcutt. These include the creation of a zero-carbon unit to co-ordinate and guide the programme of work to deliver zero-carbon housing from 2016, and further work to develop skills within the house-building industry.

I am also publishing a summary of the Pomeroy review of private-sector shared equity. Brian Pomeroy was tasked with examining how the private-sector shared-equity market is developing and what the private and public sector might do to facilitate its development. The review found that there were no major institutional barriers which were preventing a shared equity market from developing and there remains an interest in developing suitable shared equity products when conditions improve. The full text has not been published as it contains confidential information, but the summary sets out the main findings. A copy has been placed in the Library.

Finally, effective regional and local planning for the medium and long term is essential if we are to reach the target of 240 000 homes per year from 2016. We will now work with regional partners on a flexible basis to agree the work programmes and timetables with each regional planning body. The National Housing and Planning Advice Unit recently provided the Government with advice on the numbers it felt should be considered in regional strategy reviews. I am today writing to all regional assembly chairs, the North West Regional Leaders Forum, and the Mayor of London with guidance on how we expect the advice from the National Housing and Planning Advice Unit to be used.

Facing the Housing Challenge: Action Today, Innovation for Tomorrow outlines a broad response to the impact of the disruption in international financial markets on the housing market. This package will both help people facing difficulties today, and lay the foundations to help meet the long-term housing needs of the country.

However, it is not the end of the process. We will review progress and reflect on new approaches, incentives or support mechanisms which will both help address the current difficulties and deliver our longer-term programme. And we will take a proactive approach wherever it is clear that we can do more to support consumers and industry.