Social housing funder aims to encourage greater use of modern methods of construction

The Housing Corporation is preparing to offer longer term funding to developers working on large schemes.

The proposal to promise social housing grants for up to five years is contained in a draft investment strategy, announced by Steve Douglas, the body’s deputy chief executive, at last week’s National Housing Federation conference.

The offer is one of many ideas in the document for revamping the way the corporation awards grants to developers in its National Affordable Housing Programme.

The document says that longer term funding will give developers a greater incentive to make more use of modern construction methods and aid negotiations with landowners and councils. Five-year funding will only be available for strategic sites, such as East London’s Olympic Village. The document says the corporation could use its grant funding as equity on such sites to enter into joint ventures with developers.

The paper also notes that private developers and associations with a track record of delivering housing will be able to switch grants without corporation approval.

Douglas said the proposals would favour developers with landbanks. “We are now having a dialogue with the people that control the land and we are reducing our risk by having that dialogue,” he said.

The proposals contained in the strategy form the template for the next NAHP round, bidding for which could begin in April.

The corporation also stepped up pressure on housing associations to make greater use of their reserves and other assets.

“When half a million people are overcrowded and 96,000 are living in temporary accommodation, there is a moral dimension in sitting on assets,” said Jon Rouse, the corporation’s chief executive.

Housing minister Yvette Cooper also responded to concerns that the volume of private housebuilders’ output enabled them to ration housing supply. She said: “We are keen to see housing associations do more to challenge developers.”