Mr Shapps said that by Autumn 2011, every Government department with significant landbanks will publish plans to release thousands of acres of previously-developed land to housebuilders.

And to make sure that these housebuilding projections are met, the Public Expenditure Committee will carefully scrutinise each government department’s plans, to make sure every possible site is made available for housebuilding. The Government will also encourage local councils to also make their unused land available for development.

This announcement follows the launch of the Government’s ‘Build Now, Pay Later’ initiative in March this year. Under this scheme, developers will be able to build homes on Homes and Communities Agency sites without paying for the land in advance. The first six sites being developed under this new scheme are in Hemel Hempstead, Basingstoke, Tower Hamlets, Northampton, Rushcliffe and Telford. It is anticipated that these developments will create up to 3,000 new homes.

The Government’s announcement is to be welcomed by housebuilders. As the Government holds a huge amount of land, it is right that it is now freeing this land up to help alleviate the housing shortage. It is hoped that the ‘Build Now, Pay Later’ scheme will also help struggling housebuilders to get their developments up and running.

In the recent Budget, the Chancellor announced that the Government was setting up a new scheme - FirstBuy - which will see the HCA and developers provide loans to eligible first-time buyers, to help them purchase a new-build home and thus get a first foot on the property ladder.

Through the scheme, the Government hopes to help more than 10,000 first-time buyers to buy a new home over the next two years. At the same time, the scheme aims to maintain capacity in the housebuilding industry.

The Prospectus outlines the criteria against which the HCA will assess offers from developers who want to take part in the scheme, including deliverability, the type of property, standards and price. Under the scheme:

1. Eligible first-time buyers will be offered an equity loan of up to 20 per cent of the purchase price. This will be funded equally by the HCA and the developer. The buyers will therefore need to provide at least 80 per cent of the purchase price;

2. The scheme is available to households earning less than £60,000 a year;

3. The maximum property price is expected to be £280,000 (or £300,000 in exceptional cases);

4. The buyer’s mortgage will be secured as a first charge on the property. The HCA and developer will take a second charge over the property;

5. The equity loan will be interest-free for the first five years. From the sixth year, an annual fee of 1.75 per cent will be payable in monthly instalments. This fee will be increased annually in line with the Retail Prices Index, plus 1 per cent; and

6. Each equity loan term is 25 years, but repayment is required on sale of the property.

Full details of the scheme are in the Prospectus.

The HCA is now inviting bids from developers who want to offer new-build properties to eligible first-time buyers. Bidders will be asked to provide anticipated start and completion dates for building schemes and the anticipated dates of unit sales. Developers who offer early build completion dates will score more highly. The Government will not support any schemes which are due to be completed after December 2012. The closing date for bids is 19 May 2011.

The HCA intends to enter into the first contracts with developers by July 2011 and expects the first homes to be available for purchase in August and September 2011.

The new leases must be used for all shared ownership leases granted on or after 6 April 2010 for homes built with funding from the HCA (unless an earlier contract requires the use of a different form of lease). The new leases replace the model leases published in September 2009, which should be used until 5 April 2010.

The HCA believes the lease will not only simplify and speed up the home buying process but, at a time of financial caution, will assure existing lenders of shared ownership mortgages. As economic conditions improve, the revised lease should help to encourage new lenders into the shared ownership market.

The lease has been developed in conjunction with the Departrment for Communities and Local Government, the Council for Mortgage Lenders, the National Housing Federation and a number of leading mortgage lenders and providers of affordable housing. The new leases have been amended to:

• Extend the level of protection given to mortgagees of shared ownership properties;
• Update the layout and language of the leases;
• Clarify the provisions relating to alienation, rent review, making good damage to common parts and frustration in the event of damage or destruction.

The lease can be adapted by housing providers and lenders to suit individual situations, but there are fundamental clauses that must be included in any new lease. The fundamental clauses cover alienation, mortgagee protection, ‘staircasing’ provisions, protected area ‘staircasing’ provisions (where appropriate), rent review, service charge provisions (where appropriate) and right of first refusal. The landlord must also give the leaseholder a document entitled “Key Information for Shared Owners”, which sets out the main terms of the lease.