Sajid Javid pledges £600m for 50,000 new homes but fails to say where money is coming from

Up to 50,000 new homes will be built through a £600m government investment, in Boris Johnson’s first housing announcement since reaching No 10.

The money will pay for projects in five “high demand areas” in London, Bedfordshire and Essex and will include “the infrastructure and public services to match”, ministers pledged.

The Treasury insisted the investment was new funding, but was unable to say where the money was coming from ahead of the Budget in the autumn.

The new prime minister has been criticised for turning to “the magic money tree” for cash for a string of costly voter-friendly announcements appearing to indicate a looming snap general election.

The spending spree has raised suggestions that the new government will have to increase borrowing, or loosen its deficit reduction rules, later this year.

Sajid Javid, the chancellor, said the £600m would be delivered through the Housing Infrastructure Fund, which had already allocated £1.3bn to deliver up to 76,500 homes.

“We need the roads, rail links, and schools to support the families living in those homes, which is why I set up a fund to put in place the infrastructure to unlock new homes in these areas,” he said.

“And today I’m announcing hundreds of millions in new investment, helping more people get on the property ladder and allowing more communities to flourish.”

The cash comes amid uncertainty about Mr Johnson’s plans for housing, with few clues dropped before or since he succeeded Theresa May last month.

He has pledged to give “millions of young people the chance to own their own home”, but appeared to relegate that as a priority below the NHS, social care, education funding and more police.

Meanwhile, the number of new homes being built has faltered again, dropping nine per cent in the first quarter of 2019.

The government remains miles away from its target of 300,000 starts each year, despite an improvement to 222,000 in the financial year 2017-18.

There are also fears that Mr Johnson could dump the proposed ban on “revenge evictions” of private tenants pledged by Ms May in her final months in office.

The £600m will be spent on two projects in Essex (£218m and £100m), in Enfield, north London (£156m), in central Bedfordshire (£70m) and East London (£81m).

The announcement came after Mr Javid used his first interview as chancellor to propose a simpler tax system and described himself as a “low-tax guy”.

He dangled the prospect of tax cuts for high earners, after Mr Johnson’s controversial plan to hike the threshold for the 40p income tax to £80,000 from £50,000 during his leadership campaign.

“We want to set them [taxes] at a rate where we are trying to maximise revenue, and that doesn’t always mean that you have the highest tax rate possible,” Mr Javid told The Times.