Background

 

Proposals

A Consultation Paper issued in March 2003, ‘Increasing the effectiveness of powers to regulate Registered Social Landlords’, raised the issue of Social Housing Grant being given to private organisations such as developers.

 

It is unlikely that builders themselves would remain long-term landlords but more likely will lead to partnerships between builders & RSLs or private managing agents, on a more formalised basis.

 

Timescale

‘Non RSLs’ were invited to submit expressions of interest for £200 million development funding in February 2005, which saw a huge amount of interest and over subscription.

Detailed bids had to be in by April 2005; and

Budgets available from April 2006/07.

Successful bidders

In December 2005, the Housing Corporation announced seventeen successful bidders for grant under the £200 million New Partnerships in Affordable Housing (NPiAH) programme.  Four of the successful bidders are private developers, the first non-RSLs to receive grant directly from the Housing Corporation and thirteen are RSLs.  The successful bids are worth around £140 million.

 

The four successful private developer bidders are

Bellway Homes Limited;

Bovis Homes Group PLC;

First Base Limited; and

Persimmon PLC.

Plus thirteen RSLs.

 

The final allocations to each of the bidders are expected to be announced in the early part of 2006.

 

First Base Limited agreed terms to secure funding from the Housing Corporation to build subsidised affordable homes in England, in April 2006.  The Housing Corporation made an initial award of £4.32 million to First Base Limited to build 76 affordable homes in Southwark, South London.  The Company will deliver the new mixed tenure, mixed use project using a Special Purpose Vehicle (SPV).  The development is an important first step in the regeneration of Elephant and Castle.

 

In April 2006, the successful private developers (Bellway Homes, Bovis Homes, First Base and Persimmon) in the Housing Corporation's pilot New Partnerships in Affordable Housing (NPiAH) programme called on the Housing Corporation to free them from the 'impossible' demands of the terms and conditions under the programme.  Under a 250 page draft contract drawn up by Corporation lawyers, private developers face losing their allocation if they fail to meet deadlines, know as 'long stop dates' and could also be forced to hand back the homes they have built if they are badly managed by the RSLs appointed to manage them.

 

The wrangling over the terms of the contract has delayed the allocating of funds to the successful organisations.  The programme was originally worth £200 million, however the Housing Corporation only allocated funding of £140 million to the four developers and thirteen RSLs that successfully submitted bids; commenting that they would have liked to have allocated the full £200 million on offer but had too many bids that did not meet the standards.  The Housing Corporation has since issued private developers a revised draft contract.