31 March 2006
Housing associations are continuing to receive the lion's share of government money for new homes – in spite of fresh competition from private developers.
Just seven private companies are being granted funds under the National Affordable Housing Programme over the next two years, compared with 74 by registered social landlords.
A total of £66.8m is going to the private sector – less than 2% of the £3.9bn on offer from the Housing Corporation in 2006/08.
Between them, RSLs and developers are expected to build about 84,000 homes – 49,000 for rent and 35,000 for sale under one of the government's low-cost ownership schemes. Just over 2,000 homes will be built by private firms.
It is the first time that private builders have competed with RSLs for development grants on such a large scale, although the corporation handed out £140m under a pilot scheme at the end of last year.
The funding available between 2006 and 2008 represents a 15% increase on the last two-year development programme, but the number of new homes planned has risen by a third.
Danny Friedman, director of policy at the National Housing Federation, said: 'Housing associations have delivered on the efficiency agenda, building more homes for fewer subsidies.'
The largest sum going to a private developer is £31.7m, won by Wimpey to build 958 homes. A spokesman for the Home Builders Federation said it would study the allocations to see why more private firms had not won grants.
Mark Lupton, policy analyst at the Chartered Institute of Housing, said it suited the Housing Corporation to give a relatively small sum to private builders.
'It was a reasonable start in terms of developers finding their feet and the corporation getting used to dealing with developers,' he said.
Steve Douglas, deputy chief executive at the corporation, said the quality of RSL bids was higher than in previous years, mainly due to private competition and the partnering system, which focuses on larger associations.
As expected, most new homes will be built in London and Southeast England.
A total of 28,650 homes are planned in the capital, compared with just 1,550 in the Northeast, which received the smallest regional allocation of £80m.
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