Homes and Communities Agency sets out its investment plans
The government new housing and regeneration agency will help councils and regional bodies to expand funds to pay for infrastructure.
The Homes and Communities Agency will help the organisations to refinance funds they set up which allow them to borrow money for infrastructure schemes based on predicted income from planning tools, such as the section 106 agreements or the community infrastructure levy.
In its interim corporate plan, the agency said around 50 councils will need to continue their decent homes programmes beyond the 2010 deadline. Stock transfers that have not yet been completed can get a maximum of two gap funding agreements. But the agency said it would respond to the problems landlords were likely to have in financing and refinancing their decent homes plans.
The agency also said it would sell larger packages of sites, release smaller parcels of land to reduce upfront costs, and introduce deferred payment or extra investment in infrastructure in returns for guarantees of housing supply or a share of future profits. It said affordable housing would be the priority on its sites.
The agency will expect bidders for land it owns to build with fixed amounts of grant or none at all.
The HCA is still confident it can reap profits from forward-funding schemes by taking equity or profit shares, but the document said the fragile market meant these benefits would be “pushed further into the medium term” and project selection would be “particularly rigorous”.
The plan said early intervention by the agency in complex projects would reduce risk ad make them viable for private investors so reducing the need for public funds.
The agency’s regional investment plans will be drafted over the winter. A director of finance and corporate services will be appointed in this year and a director of land and development will be appointed later after their duties have been finalised next year.
The new head of private finance will work with the banking and financial sectors to develop new public-private finance models for housing and regeneration.