Birmingham deal staves off freeze on housing

A last-gasp deal between Birmingham’s biggest developing housing associations and the council has prevented social housebuilding grinding to a halt in the city.

Under the agreement, thrashed out at an evening meeting of Birmingham’s cabinet on Monday, threatened hikes in the price of land sold by the council to housing associations will be scaled back.

Estate regeneration schemes that faced being mothballed can now progress. These include Wychall Farm and Turves Green, being developed by Bromford Housing Group and a further two schemes built by Prime Focus Housing.

Peter Quinn, executive director for new business at Prime Focus Housing, said: “In the worst case scenario, [Housing Corporation] funding would have been withdrawn as we would not have been able to buy the sites. This would have meant the new-build programme in Birmingham would have dried up.”

He added that he had written to Birmingham chief executive Lin Homer in August. He explained that if the issue were not resolved, the council risked losing £63m in social housing grant. That sum would fund 1200 homes.

The problem arose six months ago when the council, acting on advice from its lawyers and valuers, decided to up the cost of land it was selling to associations.

It was concerned it was not meeting ODPM guidelines on securing the best price for the disposal of public assets.

The council’s actions sent shockwaves through the sector in the city. One source claimed the cost of land on a scheme to build bungalows for elderly tenants had risen 70% to more than £1m.

Under the deal agreed on Monday, the council will take account of the fact that the land will be used for social housing, not high-price city flats, when valuing sites.

Bromford is a Housing Corporation partner and plans to build 1100 homes over the next two years, many in Birmingham. Tony Bowran, head of development at Bromford, said: “We have three major schemes and six to seven phases would have been affected. If this agreement had not been reached, we would not have been able to progress.”

The other associations mainly affected by the deal are Waterloo and West Mercian. Alongside Prime Focus and Bromford, they build the bulk of social housing in Birmingham.

Jon Rouse, chief executive of the Housing Corporation, said: “Lin Homer and I are both well aware of the problems here and hope that the way forward we have agreed will sort out the situation.”

John Lines, Birmingham cabinet member for housing, said: “This is great news. We can move forward with our plans immediately and work with housing associations.”