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Housing Associations told to buy cheap not green

Posted: 26/05/2008

The Housing Corporation is allocating £200 million for Housing Associations to buy up houses which developers are finding hard to sell in the current slightly depressed economic climate. The money, announced recently by prime minister Gordon Brown, will be taken from the existing £8.4 billion national affordable housing programme(NAHP).

But unlike the NAHP, and English Partnerships developments, it will not have to be spent on homes that meet level 3 or higher of the Code for Sustainable Homes, the corporation has confirmed. Even houses which barely pass basic Building Regulations will be considered if they are sufficiently cheap.

Senior housing association figures have had talks with the corporation and the government about creating a 'housing market package' programme, similar to the one which was introduced during the negative equity crash of the 1990s, where a select group of housing associations was given 100 days to spend £577 million of government grant plus £400 million of private cash on 180,000 empty homes which had already been built.

Many of the homes which could be snapped up are, however, likely to be small one and two-bedroom properties, rather than the larger family homes which are in such short supply. According to the housing paper 'Inside Housing', developers are already offering discounts of up to 15 per cent to housing associations for stock that they are struggling to shift.

Steve Nunn, chief executive at Tower Homes, said it had been contacted by several house builders. 'We are seeing developers keen to talk to us to offload schemes. If they feel there's uncertainty in the market they are looking to get some certainty by selling some housing to registered social landlords.'

Ken Cox, director of Asset Trust Housing, said that the surplus stock on offer was likely to be small, high density flats and not the family homes most needed by social landlords.

A spokesperson for the National Housing Federation warned that any new rescue package should not repeat mistakes made by the earlier scheme. 'It's important to learn from the previous scheme which ran during the last housing downturn. The properties should definitely comply with the Code for Sustainable Homes. ensuring the homes were eco-friendly and suitable for social renters', he added.

The government introduced the code in 2006. It sets environmental standards for new homes, with a rating of one to six, where six is the highest. From April this year all schemes funded by the Housing Corporation through the NAHP have had to meet level 3.

Tom Lloyd-Smith, senior housing quality and design officer at the Housing Corporation, confirmed that code level 3 would not be a requirement for funding. When pressed on the issue he told the conference that even properties that only met level 1 of the code would be considered.

Delegates at a conference on the future of the Code expressed concern about the relaxation of the criteria. One attendee, who asked not to be named, said the move undermined ongoing work to improve the sustainability of homes. Another suggested it could be building up problems for the future: 'The least they could do is ensure the saving is used to improve the houses.'


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