Councils encouraged to build affordable housing

Move to increase affordable housing

Monday, 05, Nov 2007 12:00

The government hopes to boost the supply of affordable housing by giving local councils more control over new developments.

Local councils will be encouraged to make affordable housing deals when making land available for development, creating hundreds of affordable homes in each new project.

Housing minister Yvette Cooper set out the new plans today, hailing it as a groundbreaking deal that would benefit key workers and first-time buyers.

The scheme will allow local councils to broker their own deals to struggling buyers for new homes built on their land.

Ms Cooper said: "We urgently need to build more homes for first time buyers and families. That's why we are investing £10.2 billion to increase affordable and social housing.

"But government cannot deliver this alone. This is a new way to help councils to do their bit to support new homes for key workers and families in their areas."

The government estimates thousands more young people could be helped onto the housing ladder if councils take up the option.

So far 14 local authorities have expressed interest in the scheme, which sees them work with private developers as Local Housing Companies (LHC).

The scheme is designed to make it attractive for local authorities to make land available for housing. At present councils can have little influence over how land is developed once it is sold to private developers.

LHCs are designed to return control to councils, making the local authority key in agreeing development plans, as well as allowing councils to profit from the rise in land values.

Ministers estimate each LHC could deliver up to 1,000 new affordable homes each.

The first councils to establish LHCs will be Leeds, Sheffield, Nottingham, Newcastle, Wakefield, Sunderland, Dacorum in Hertfordshire, Harlow, Peterborough, Bristol, Plymouth, Wolverhampton, Manchester, and Barking and Dagenham.