More affordable homes

According to Inside Housing:

The housing minister’s attempt to start the next affordable homes programme before the general election is unlikely to have a significant impact, sector figures have warned.

Kris Hopkins announced last week that providers will be paid 75 per cent, rather than 50 per cent, of grant upfront if they start schemes funded under the 2015-18 programme before 31 March 2015.

The minister is under intense pressure to increase house building before the election in May, following the release of sensitive government documents on Wednesday.

The documents, leaked to the BBC, warned that house building figures will show a decline in starts just weeks before an election in which housing is expected to be
a key battleground. Emma Reynolds, shadow housing minister, has called for the documents to publish the sensitive documents.

But the new policy, where 75 per cent is paid when the provider starts on site – instead of 50 per cent – and 25 per cent when it completes the development, was predicted to have a minor impact by sector figures. Landlords warned that with grant rates at an average of just £10,000 per home for the Homes and Communities Agency 2015-18 programme, the extra incentive was unlikely to make starting early significantly attractive.

Ian Munro, chief executive of New Charter Housing, said: ‘The average grant is so low an extra 25 per cent isn’t going to change or speed up development much.

‘It would slightly improve cashflow but I can’t see many people bringing developments forward as a result. I think [ministers] are probably desperate to get the numbers up as much as they can before the election.’

Dale Meredith, development director at Southern, said: ‘Broadly we would welcome it, because it will have a small but beneficial effect on schemes, but may not do much as the additional money is really not very much.

Steve Stride, chief executive of Poplar Harca, calculated the additional grant to be worth between £3,000 and £4,000 per home.

‘That’s not a lot, but every little helps,’ he said.

The additional upfront grant applies to the HCA’s £1.7bn 2015/18 affordable homes programme, and was made available from Tuesday. Allocations of grant are due to be announced later in the summer.