RSLs rush for affordable homes cash

14 Nov 02
A £200m 'challenge fund' set up by the government to encourage housing associations to provide more affordable homes in Southeast England has been five times oversubscribed.

15 November 2002

The Housing Corporation, which invited the 50 largest registered social landlords to bid for money but did not preclude other associations from taking part, received more than 90 applications in just six weeks.

Worth a total of more than £1bn, the bids would amount to more than 21,000 new homes – though the government only wants 4,000 to be built using the fund.

Housing minister Lord Rooker will announce soon which RSLs have been successful.The £200m was top-sliced from the corporation's £1.3bn approved development programme (ADP) for 2003/04. The aim is to encourage RSLs to devise innovative ways of providing new housing for rent or low-cost sale, possibly in conjunction with private developers.

Norman Perry, the corporation's chief executive, said it was not possible to increase the size of the fund without reducing the remainder of the ADP, which allows for up to 22,700 homes to be built next year. 'If we had more money, we could build more houses,' he said.

A report by the pressure group London First, published on November 7, called for private developers to receive subsidies and tax breaks to encourage them to build more affordable homes. The recommendation was one of 68 made by the group, set up by the government to look at housing and other problems in the capital.

According to Perry, next year there is likely to be a keen debate over whether RSLs should compete with developers in building homes for sale at market prices instead of focusing on low-cost or social rented housing.

Some associations already build homes through subsidiaries but are not regulated by the corporation in the same way as for other activities. 'It's a risky business building houses for sale,' said Perry. 'We would be very careful if it came into the regulated area. Only stable RSLs would be able to do it.'


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