Housing Corporation will provide financial incentives for houses that have more space

The Housing Corporation will unveil incentives for developers to build bigger rooms in its new investment plan next week.

The corporation’s new design and quality standards, which all developers applying for grants must comply with, will set out financial rewards for generous room sizes. The 2008 to 2010 round of the programme, which funds the construction of about 40,000 low-cost homes by private developers and registered social landlords each year, is due to be launched next week.

The incentives were influenced by Design for Homes’ “Swing the Cat” website, which recommends that 77m2 is the minimum amount of space required by a four-person family.

Steven Douglas, deputy chief executive officer of the Housing Corporation, said: “We seek to drive up standards in the homes we fund. Incentives underpinned by minimum standards help deliver higher performance.

“We’ll set these out in full in our new design and quality standards. When bidders exceed these, they’ll be rewarded and stand a better chance of receiving grant funding.”

The social housing quango’s scheme development standards, which apply to all grant-funded homes, have not been updated since they were introduced in 1996 and are now viewed as unsatisfactory.

This is partly because residents need more space to accommodate appliances and also because they have less private outdoor space as a result of higher-density housing. The new incentives have emerged following the publication of research by the South East England assembly last week showing that a rising proportion of the region’s housing is small one- and two-bedroom flats.