Demand in social housing sector set to be boosted by plans to let councils sell assets to increase investment

The government's plans to revamp council house funding are likely to open up fresh opportunities for the private sector.

As reported in last week's Building, Ruth Kelly, the newly appointed communities secretary, has announced that the government is to allow councils to invest more of their assets in housing.

Under the plans, laid out in a consultation document that was published after Building went to press, high-performing councils will be allowed to dispose of their housing assets to provide additional investment.

The paper suggests that there is "considerable scope" for authorities to launch their own shared-equity housing schemes, following the lead of English Partnerships'

London-Wide Initiative. And it says the government is keen to explore how authorities can use their landbanks to provide council housing. The new arrangements will be piloted by six councils.

Kelly’s paper suggests councils launch their own shared-equity housing schemes

The paper also argues that councils engaged in large-scale regeneration should have more time to bring their stock up to the Decent Homes standard. It says: "We will relax the constraint of 2010 in a limited number of cases for authorities engaged in or wishing to pursue major transformations of estates."

As predicted in Building, Kelly also confirmed that the government has replaced its Decent Homes target with the goal of creating "decent communities". The announcement signals that the government is changing the focus of social housing policy from the refurbishment of existing stock to the provision of affordable homes.

Geoff Zitron, director of housing consultancy Tribal, said: "There are going to be significant opportunities for building contractors that have geared up for more complicated forms of procurement, not simply those doing it in housing."

He added that the contractors most likely to benefit were those willing to contribute equity over a long period, such as those operating long-term maintenance agreements in the education sector.