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Councils could offer thousands of affordable housing deals to help key workers and first time buyers onto the property ladder under a just announced scheme.
The scheme, detailed by Housing Minister, Yvette Cooper, marks a return of the local authority to the centre stage in providing homes for communities, but in a new way - through Local Housing Companies (LHCs).
Councils will be able to offer their own deals for key workers and first time buyers through new homes built on their land. And thousands more young families could get a step onto the housing ladder as a result if councils take up this option.
New guidance for establishing LHCs has been published for the first 14 local authorities who've expressed an interest in the scheme.
LHCs are a new partnership between councils and the private sector being tested as one of a range of models to help local authorities to bring forward land for housing development, in particular to help increase the supply of affordable housing.
Currently, councils, once they sell off surplus land to the private sector, have limited influence over how it is developed, or the type and quality of housing provided.
However, new LHCs could put the destiny of that land back into the hands of councils enabling them to double affordable housing levels to at least 50% on sites, and directly offer key workers and first time buyers shared equity deals.
Under the proposals to be piloted, councils would provide their surplus public sector land to the LHC. The local authority would play a full part in agreeing the development plan, including being able to directly offer low cost housing deals to meet local needs.
In return for taking the land cost out of the equation, private sector partners such as housing builders, including the Registered Social Landord sector, would provide equivalent investment and the construction expertise needed to build the homes.
It is argued that local authorities could also benefit from the increasing value of land on the site that could be ploughed back into providing more affordable homes.
Each LHC, which could have the potential to deliver up to 1,000 new homes, are a key part of the Government's Housing Green Paper designed to meet the Prime Minister's target to provide three million more homes by 2020. The Government meanwhile is investing £10.2 billion over the next three years on more affordable and social housing.
07 November 2007 © Moneyextra.com
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