£300m announced to build 10,000 affordable homes

Communities Secretary Eric Pickles has announced that the government is to make more money available to councils to invest in new homes over two years from 2015. The money will be funded through an increase in the housing revenue account borrowing cap and will be a boost to councils that have been complaining over available funds to build more social housing.

The announcement was made by Mr Pickles along with the Chief Secretary to the Treasury Danny Alexander. They also said that in a bid to build more that 10,000 new homes the government would be looking to sell off high value social housing stock and replace it with mor practical accommodation for families across Britain. This seems like a good idea as some of the flats in London that are occupied by council tenants are worth over £1m.

High value stock to be replaced by cheaper homes

The idea is to sell these properties and replace them with newly built properties that would be worth a third of that. if you were cynical you may say that many of these properties have become vacant in prime parts of London because of the housing benefit caps that were introduced by the government last year which has enabled these expensive homes to be sold by local authorities to fund newly built homes.

There are many benefits to doing this not least to reduce the amount of many that is spent maintaining the old stock of victorian flats and houses that is used for social housing. The cost of heating a new home is also considerably lower than than a victorian property.

The Government has published a prospectus setting out the way that councils can bid for a share of £300 million to build new homes. The scheme was first announced in the Autumn Statement by the Chancellor George Osborne. The scheme is part of a wider reform of the way that councils fund their new housing projects.

As part of the reforms councils will be allowed to keep their own revenues from social housing to include rent receipt and receipts for land and property sales. they will also be able to sell land at below market valuations to a broad range of organisations in order to build new affordable housing.