Housing Corporation postpones plan to share sales profits

13 Sep 07
The Housing Corporation has postponed its plan to claim some of the profits from the sale of grant-aided new homes.

14 September 2007

The Housing Corporation has postponed its plan to claim some of the profits from the sale of grant-aided new homes.

The corporation, which currently reclaims the original value of the grant from registered social landlords if it is not reinvested within two years, was proposing to demand a larger sum linked to current house prices.

But, following an outcry by housing associations, it announced on September 7 that it would postpone the changes.

Acting deputy chief executive Pete Marsh told Public Finance that the corporation had decided in principle that where grant had paid for 25% or more of the original property, it would link any money it reclaimed to house values. But he said that RSLs could avoid losing any of their profits by improving efficiency and using less grant.

'The postponement will provide a carrot that might be replaced in future by a stick,' he added.

Neil Griffiths, research leader at the National Housing Federation, welcomed the delay but said clarity was needed on how any efficiency improvements would be assessed.

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