New government scheme includes £12m to buy housebuilders' unsold stock for use as affordable homes

The government has approved a £53m bail out of the housing industry in the West Midlands.

Regional minister Ian Austin will outline the scheme, which includes £12m to buy housebuilders' unsold stock of new homes that have failed to sell in the downturn. Homes will be sold as affordable through the national clearing house system.

The bulk of the package has been earmarked for the West Midlands National Affordable Housing programme, with some £31m going to the Homes and Communities Agency -led scheme.

Austin will announce the measures at a forthcoming National Housing Federation conference in Villa Park, being careful to underline the global nature of the credit crunch.

He is expected to say: “Like all countries across the world, we are being hit hard by the credit crunch and, while it may have been caused in the US, the effects are all too local.

“Times are really tough, and what people looking for a home, housebuilders and housing associations all need is a government taking action and providing real help now. We are working to continue developing the homes we need, to maintain confidence in the housing market, to support jobs in construction and to maintain the skills we'll need when the economy improves.”

The move is part of £1bn package of measures from government aiming to retain skills and capacity in the housebuilding sector over the recession.