04 July 2008
Housing associations and other developers are to be offered a larger share of grants before they start building, in a move to revive the industry during the credit crunch.
Housing providers can now apply for more money upfront, instead of having to wait until a scheme is completed to receive the second 50% of grant from the Housing Corporation, housing minister Caroline Flint announced this week.
The corporation is also setting up a national clearing house where house builders can sell unsold properties to registered social landlords.
In an announcement on July 2, Flint promised that the government would remain as ambitious as possible while adapting to the economic climate.
'We have to acknowledge not only the difficulties faced by individuals and families, but by house builders, too,' she said.
It will be left to the corporation to decide how much grant it pays upfront, but in some cases it might offer as much as 80%. Before 2006, when grants were first offered to non-RSLs, just 20% was held back until schemes were completed.
The corporation is giving a further £270m to RSLs and other providers to build about 6,000 homes for rent and affordable sale. The grants, part of a new system of quarterly bidding, are on top of £3.3bn allocated in February at the start of the 2008/11 National Affordable Housing Programme. In future, bids will be invited on a continuous basis.
A further 31 bodies, including 16 arm's-length management organisations, are eligible for grants, having pre-qualified for the NAHP.
Steve Douglas, the corporation's chief executive, said it would speed up timescales and provide quicker feedback.
'In the current market I am extremely pleased that we have once again been able to broaden the base of supply.'
The Trades Union Congress this week joined calls for the government to stimulate house building and questioned whether the target of 3 million new homes by 2020 was enough. Last week, the National Housing and Planning Advice Unit suggested that 3.5 million might be needed.
The Department for Communities and Local Government, meanwhile, launched a sixth round of Private Finance Initiative housing schemes, worth £1.87bn, on July 2.
While the PFI is used to build new homes as well as for refurbishment, interest has dwindled in the past two years.
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