26 March 2004
The Housing Corporation has announced its largest investment programme, totalling £3.3bn, to fund more than 67,000 new homes in the next three years.
The announcement came as ministers launched the Key Worker Living programme to replace the three-year old Starter Home Initiative, which failed to reach its targets.
For the key worker programme, the corporation has allocated £667m to provide 16,000 new homes for public sector employees, such as teachers and nurses, designated at the launch by Deputy Prime Minister John Prescott.
For the first time, the total package is concentrated on housing associations that have achieved 'partner' status by demonstrating to the corporation their ability to offer value for money.
Just 71 associations will share £2.6bn, in a departure from earlier practice in which development funds were widely dispersed.
The corporation is also emphasising 'modern methods of construction', which mainly involves building homes from prefabricated components.
Peter Dixon, the corporation's new chair, called the programme 'highly ambitious, but achievable'. He said it confirmed the quango's role as the government's 'key agent' for delivering affordable homes and sustainable communities.
The National Housing Federation welcomed the announcement, but called for an intelligent discussion with the corporation about how to use the resources of associations outside the 71 chosen as partners.
Speaking at the programme launch on March 23, Prescott admitted the government had underestimated the need to promote starter homes. He promised that the new scheme, worth a total of £690m with contributions from other Whitehall departments, will be better targeted and easier to understand.
After a poor start, the £250m SHI helped 9,000 first-time buyers afford homes in London and the Southeast – 1,000 below the original target. 'A lot of people weren't aware of the programme,' said Prescott.
In spite of the money available for equity loans and shared ownership schemes being almost trebled, the number of workers that will be offered help under the new programme is expected to be only 75% higher, mainly due to rising house prices.
A wider range of workers will be eligible for loans and other assistance, including college lecturers, prison officers and local authority planners.
PFmar2004
