New homes bonus
The New Homes Bonus (NHB) was introduced in 2011 by the coalition government to encourage local authorities to grant planning permission for new houses in return for additional revenue.
Under the scheme, grant funding is provided annually by central government matching the extra council tax raised by new-build homes, conversions and long-term empty homes brought back into use. Payments are also made for providing affordable homes.
The grant is unringfenced. Councils work with the local community to decide how to spend the funding. This does not have to be on the provision of new homes, and might include council tax discounts for local residents, improving local services or providing local facilities.
By 2016/17 more than £4.8 billion had been allocated.
However, in October 2013 the Public Accounts Committee’s suggested that “The Department (DCLG) has yet to demonstrate that the new homes it is funding through this scheme are in areas of housing need…”
In 2014, the Government conducted an evaluation of the effect of the scheme and in the autumn 2015 spending review confirmed a move to allow the full retention of business rates by 2020 and a preferred option of saving at least £800m from the scheme.
In 2015, the government launched a consultation on options for changes to better reflect local authorities’ provision of new housing, suggesting that it “…is appropriate to consider how the incentive element of the Bonus could be further tightened alongside possible changes to respond to the move towards full retention of business rates and the potential for further devolution of powers and responsibilities to local authorities.”
A consultation in 2016 sought views on ways to better reflect authorities’ delivery of new housing and reduce the number of years in which payments are made.
At the end of 2016, the government confirmed:
- A move to 5-year payments in 2017/18 and then to 4 years from 2018/19.
- The introduction of a national baseline of 0.4% housing growth below which grants will not be made.
However, it will not, for now, proceed with plans to withhold payments from local authorities who have not submitted a local plan.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Plumbing and heating for sustainability in new properties
Technical Engineer runs through changes in regulations, innovations in materials, and product systems.
Awareness of the Carbon Border Adjustment Mechanism
What CBAM is and what to do about it.
The new towns and strategic environmental assessments
12 locations of the New Towns Taskforce reduced to 7 within the new towns draft programme and open consultation.
Buildings that changed the future of architecture. Book review.
The Sustainability Pathfinder© Handbook
Built environment agency launches free Pathfinder© tool to help businesses progress sustainability strategies.
Government outcome to the late payment consultation, ECA reacts.
IHBC 2025 Gus Astley Student Award winners
Work on the role of hewing in UK historic conservation a win for Jack Parker of Oxford Brookes University.
Future Homes Building Standards and plug-in solar
Parts F and L amendments, the availability of solar panels and industry responses.
How later living housing can help solve the housing crisis
Unlocking homes, unlocking lives.
Preparing safety case reports for HRBs under the BSA
A new practical guide to preparing structural inputs for safety cases and safety case reports published by IStructE.
Male construction workers and prostate cancer
CIOB and Prostate Cancer UK encourage awareness of prostate cancer risks, and what to do about it.
The changed R&D tax landscape for Architects
Specialist gives a recap on tax changes for Research and Development, via the ACA newsletter.
Structured product data as a competitive advantage
NBS explain why accessible product data that works across digital systems is key.
Welsh retrofit workforce assessment
Welsh Government report confirms Wales faces major electrical skills shortage, warns ECA.
A now architectural practice looks back at its concept project for a sustainable oceanic settlement 25 years on.
Copyright and Artificial Intelligence
Government report and back track on copyright opt out for AI training but no clear preferred alternative as yet.
Embedding AI tools into architectural education
Beyond the render: LMU share how student led research is shaping the future of visualisation workflows.
Why document control still fails UK construction projects
A Chartered Quantity Surveyor explains what needs to change and how.
Inspiration for a new 2026 wave of Irish construction professionals.
New planning reforms and Warm Homes Bill
Take centre stage at UK Construction Week London.