Councils to offer affordable housing 'deals' - Newcastle and Sunderland to benefit

Councils, including Newcastle and Sunderland, could offer thousands of affordable housing deals to help key workers and first time buyers onto the property ladder under a groundbreaking scheme, announced Housing Minister Yvette Cooper today.

This marks a return of the local authority to the centre stage in providing homes for communities but in a new way - through Local Housing Companies (LHCs).

New guidance for establishing LHCs was published today for the first 14 local authorities who have expressed interested in the scheme. These include Newcastle and Sunderland in the North East.

Councils will be able to offer their own deals for key workers and first time buyers through new homes built on their land. Thousands more young families could get a step onto the housing ladder as a result if councils take up this option.

Yvette Cooper said:

"We urgently need to build more homes for first time buyers and families. That's why we are investing £10.2 billion to increase affordable and social housing. But Government cannot deliver this alone. This is a new way to help councils to do their bit to support new homes for key workers and families in their areas."

Local Housing Companies are a new radical partnership between councils and the private sector being tested as one of a range of models to help local authorities to bring forward land for housing development, in particular to help increase the supply of affordable housing.

Currently, councils once they sell off surplus land to the private sector have limited influence over how it is developed, or the type and quality of housing provided.

But new Local Housing Companies could put the destiny of that land back into the hands of councils enabling them to double affordable housing levels to at least 50 per cent on sites, and directly offer key workers and first time buyers shared equity deals.

Under the proposals to be piloted, councils would provide their surplus public sector land to the Local Housing Company. The local authority would play a full part in agreeing the development plan, including being able to directly offer low cost housing deals to meet local needs.

In return for taking the land cost out of the equation, private sector partners such as housing builders, including the Registered Social Landlord sector, would provide equivalent investment and the construction expertise needed to build the homes.

Local authorities could also benefit from the increasing value of land on the site that could be ploughed back into providing more affordable homes.

Each Local Housing Company could have the potential to deliver up to 1,000 new homes. They are a key part of the Government's Housing Green Paper to meet the Prime Minister's target to provide three million more homes by 2020. The Government is investing £10.2 billion over the next three years on more affordable and social housing.

Notes to Editors

1. The Housing Green Paper set out proposals for Local Housing Companies.

2. English Partnerships today issued guidance to the 14 local authorities who have expressed in the scheme. These are Leeds, Sheffield, Nottingham, Newcastle, Wakefield, Sunderland, Dacorum, Harlow, Peterborough, Bristol, Plymouth, Wolverhampton, Manchester and Barking & Dagenham

3. Each LHC would act as the master developer within a designated area and will work with other investors and contractors. They will develop new mixed communities and will be able to include at least 50% affordable housing, for key workers and first time buyers.

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