Housebuilders split over change to planning gain funding rules

Housebuilders are split over the Housing Corporation's decision to adopt a much more hardline stance over the use of public funds to pay for homes built through planning gain agreements.

Such agreements are the method by which councils force developers to build social housing in return for planning permission.

But, as revealed in last week's Housing Today, in future the corporation plans only to pay development grant to programmes in which housing associations have been involved from the beginning (HT 3 October, page 14).

One leading housebuilder backed the proposal. Martin Donohue, chief executive of Westbury, which builds around 450 homes under planning gain agreements each year, said: "I would like to see RSLs funded for the length of a project rather than year-on-year.

Placing constraints such as these on developers is not going to help deliver more housing

Charmaine Young, St George

"If this were the case it would provide certainty and transparency, and I would be happy to involve associations from day one."

But Pierre Williams, spokesman for the House Builders Federation, said: "[We understood] that the government's intention was for closer cooperation between private developers and housing associations, so that each could use their particular expertise to speed up delivery.

"However, this decision by the Housing Corporation will surely produce the opposite effect by adding more – almost certainly unnecessary – consultation. The adage 'too many cooks spoil the broth' springs to mind.

RSLs should be funded for the length of the project, rather than year-on-year, to provide transparency

Martin Donohue, Westbury

"Getting planning permission is never easy for either the social or private sector, and subsidy for affordable housing is a vital component in deciding on project viability."

His stance was echoed by Charmaine Young, director of regeneration at London developer St George, which sells on around a third of its stock to associations as affordable housing each year. She said: "I'm not quite sure how the corporation thinks this will benefit the drive to increase housing numbers in areas of high demand. It is increasingly difficult to deliver homes of any tenure in London. Placing further constraints such as these on developers is not going to help. We should all be focusing on what we can do to deliver more housing."

Jim Coulter, chief executive at the National Housing Federation, said: "I think this is an excellent stance. As things stand just now, housing associations are played off against one another – this is anti-competitive.