The Way Forward for Housing Capital Finance outlines the changes to the grant, which councils lend to housing associations to fund new housebuilding.
The paper also details how the Office for the Deputy Prime Minister intends to introduce the pooling of receipts from the right to buy, following last year's local government white paper.
John Perry, Chartered Institute of Housing policy director, said he broadly welcomed the consultation. But he thought some councils might not be happy to see the abolition of their social housing grant.
He said the present arrangement worked to the advantage of councils as they could effectively spend the money twice: councils lend the money to landlords and the loans are paid back by the Housing Corporation.
But he added: "It is difficult to defend the current system because it is very complicated."
The government has proposed two options for replacing the LASHG:
- money could be distributed directly to registered social landlords along with the existing Approved Development Programme funding
- councils could make grants to housing associations in line with the regional housing statement – this option would be financed by capital receipts.
Perry said: "This could mean a larger chunk of right-to-buy funds kept locally."
The paper refers to an overall valuation of the country's council housing stock of £100bn.
Perry said: "That's probably based on average figures for transfers that have taken place to date, but it's new to me."
Source
Housing Today
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