A number of recent announcements have paved the way for Sir Bob Kerslake (Chief Executive of the Homes and Communities Agency (HCA)) to achieve badly needed investment in the housing and regeneration sector.
The current proposals for use of the recently reported £5.4bn budget for 2009/2010 include:
- The £400m Kickstart Housing Delivery Programme put together by HCA. Funding is available to organisations that control land including housing associations and private sector developers and will be specifically allocated to housing-led schemes which can start on site in the 2009/2010 financial year.
- An additional £100m pot will be made available to local authorities by the HCA to deliver new council homes for rent themselves (any share to be boosted by the local authority's own prudential borrowing capability).
- The establishment of an investment fund by the HCA for the private rented sector – the Private Rental Sector Initiative (PRSI). Expressions of interest have been called for by the HCA for institutional investment into privately rented housing schemes with the possibility of a guarantee on investor returns to encourage longer-term investment.
- New 'rent to buy' schemes are being launched by housing associations, such as London & Quadrant, where purchasers are offered a discounted rent on a property until they are in a position to buy.
- Pre-pilot schemes in Barnet and Edinburgh are looking at opportunities to implement a financing model similar to the tax increment financing model seen in the US. This enables local authorities to finance regeneration schemes based on future tax incomes (increases in business taxes and SDLT as a result of the regeneration). This is still in the very early stages of consideration as it would require a change in legislation in the UK.
Alongside these new measures, the existing investment models of PFI and local housing companies will continue to be used which along with the overhaul of the housing revenue account system should offer local authorities a number of different routes to secure their housing objectives. The sixth round of housing PFI schemes is due to be announced next month, with around twenty four local authorities bidding for approximately £1.8bn PFI credits. There are also fourteen pilot schemes for local housing companies (public/private joint venture vehicles) in development, with the London Borough of Barking and Dagenham at the forefront.
With the government's Decent Homes target looming in 2010, and the increasing pressure on the housing and regeneration market as a result of the economic downturn, these measures will need to have a real and immediate impact to boost the housing market generally and to ensure that the ever increasing gap in numbers of affordable homes is plugged.